Egypt’s economy takes stable steps, made significant progress and improvement in very difficult circumstances over the past 2 years

Hossam Mounir
11 Min Read
Vice chairperson of the Union National Bank-Egypt (UNB), Mohammad Nasr Abdeen

Vice chairperson of the Union National Bank-Egypt (UNB), Mohammad Nasr Abdeen, said that the Egyptian economy took stable steps and made progress and improvement over the past two years despite very difficult conditions.

Abdeen told Daily News Egypt that Egypt has all the elements of success and the state and people have nothing to do but to work hard and to take advantage of Egypt’s resources.

He noted that the Suez Canal Area Development Project represents a promising opportunity in front of local and international investments that are looking for safe and profitable investment.

He confirmed that UNB is making constant efforts to support serious investors who work in   the Egyptian market.

In addition, UNB has ambitious plans to expand the small- and medium-sized enterprises (SME) sector.

What is your vision for the Egyptian economy in the current period?

Egypt’s economy is based on many rules, and people must be aware that the state takes stable steps through extremely difficult conditions, so despite the many problems that face Egypt’s economy, there are some noticeable economic and political developments.

When people look at the evolution of the economic situation over the past 30 years and what happened during the recent period—either in launching mega-projects or recovering Egypt’s position in the Arab World, Africa, and internationally—they will find that there is a boom in Egypt’s economy.

Large projects usually have a long-term strategic impact; no one can see their returns on the spot.

At the same time, the state has not ignored the needs of individuals. There is a huge increase in the wages system and in development projects, as well as an improvement in international relations, which open up many areas for Egyptian labour to achieve economic developments.

In your opinion, what are the strengths and the weaknesses of the Egyptian economy?

First, we must focus on the strengths. Through surveying many global institution reports, we can find indicators that confirm that the Egyptian economy has achieved progress and noticeable improvement over the past two years.

These improvements in the Egyptian economic performance are seen in many areas, such as the fight against corruption, increased competition and human development, support for innovative capacity, development of communications and information technology, achievement of economic freedom, preservation of investors’ rights, and maintained security.

The Egyptian economy still has many attractive opportunities, and people must work harder for Egypt’s sake.

The Egyptian economy is undoubtedly capable of overcoming the difficulties. The achievements made should not be underestimated. It must be clear in people’s minds that major development projects are the real way to build a stable economy for a promising future.

These projects will provide food, energy, and housing, and will create new urban communities for the reconstruction of additional areas for Egyptians to reside, compared to the current areas, which do not exceed 6% of Egypt’s space.

We must all realise that Egypt has all the elements needed for success, including a huge market and diverse human resources that only need to be trained, in addition to the diversity of the Egyptian economy and Egypt’s excellent geographical location.

I think that the state and people only have to work hard and take advantage of our resources in order to boost production and get out of the current economic difficulties.

In your opinion, what are the requirements to push the Egyptian economy to grow?

We need to awaken our dignity. We are a strong people, more than 90 million, and we all have the experience and competency needed to achieve our goals. It is not acceptable to continue relying on other countries’ support, even if they have good intentions.

Thus we must rely on ourselves through working hard and doubling production. We must also make decisions to limit the import of goods, as Egypt is a country that imports most of its needs.

Borrowing from international financial institutions is normal and done by all countries, as long as the loans are geared towards investment purposes, such as investing in large projects based on well thought out plans. This is besides the possibility of borrowing to support cash reserves and to meet needs by importing strategic commodities, but usually such loans are directed toward supporting investment projects.

What are the activities or projects that can help quickly advance the Egyptian economy?

The developmental map of Egypt became clear through President Abdel Fattah Al-Sisi’s announcement of the Suez Canal Area Development Project, the proposed major road network, and the cultivation of 4m acres in several stages.

The new draft of the Suez Canal area, which is part of an industrial, commercial, and comprehensive scheme for Egypt, represents a promising opportunity to both local and international investors that are looking for safe and profitable investment opportunities.

All states that have exceeded us in development relied heavily on foreign direct investment.

In order to establish such projects and others in the Suez Canal area, we must overcome bureaucratic hurdles. Foreign investors need a suitable legislative environment and laws that protect investment in addition to a study by the state to show the extent of investors’ commitment to continue their projects.

Besides the new Suez Canal Area Development Project and other mega projects, there is also an absolute necessity to support projects of small- and medium-sixed enterprises (SMEs) to relieve the unemployment problem, improve the standard of living, and extend these SMEs to serve mega projects.

It is also important to attract foreign investors that have experience in industrial, petrochemical, and technological projects, the manufacture and maintenance of ships, storage of petroleum products, and oil refining, as they are all huge projects that require large investments.

How can the state overcome the foreign currency crisis?

The solution lies in re-examining Egyptian imports.

Egypt is dependent on the import of many goods that can be discarded, such as luxury goods. The continued decrease of incoming US dollars has led to an imbalance between the supply and demand of US dollars and has created a gap that Egypt now must address.

I would like to emphasise that leaving the market without control will lead to a very large decline in the Egyptian pound against the US dollar. We should work to increase exports by supporting and encouraging exporters.

What is the role of banks in supporting the Egyptian economy?

Banks have a large volume of deposits and banking expertise, which attracts the confidence of international financial institutions. There are precedents for deals between the state banks and international financial institutions.

In addition, all banks are ready to finance the Suez Canal Area Development Project as these banks have huge liquidity, which makes them keen to finance investment projects, especially projects that have competitive benefits and rewarding returns.

The banks also seek to revive the movement of investments and demand for credit to share in some stakes in these projects.

What are the projects and activities that UNB funds to serve the Egyptian economy?

UNB has the ambition to expand in the small- and medium-sized enterprises (SME) sector, aiming to reach segments of several social backgrounds to attract clients to this sector as well as to provide permanent training programmes and improve performance. The bank believes that supporting such projects plays an important role in economic development.

The bank provides financing solutions to different segments of SME clients and provides high-quality services that best suit their needs through the bank’s branches.

This is in addition to a department for SMEs with a well experienced staff that works constantly on developing the sector and providing better opportunities for small investors.

The bank seeks to raise the staff efficiency to achieve the desired growth in the bank’s portfolio of this sector in line with the bank’s policy and vision to support and develop SMEs because of their importance as the backbone of the future Egyptian economy.

UNB set a specific strategy to increase funds to SMEs to 20% of the total loans and facilities portfolio of the bank over the coming four years.

The bank aims to increase funding to SMEs to 8% by the end of this year.

UNB already launched a number of programmes to finance small- and medium-sized projects in cooperation with the Social Fund for Development (SFD).

The bank also sponsors a number of programmes that aim to spread awareness about the foundations of small- and medium-sized projects, provides tips on how to prepare feasibility studies, and directs small investors who wish to enter the labour market. This is in addition to launching campaigns to train young investors through a team of marketing experts.

UNB is making unremitting efforts to support serious investors who are working in the Egyptian market, and the bank has been a main source of the letters of guarantee to companies drilling the Suez Canal.

The bank also launched a campaign to encourage Egyptians working in the UAE to transfer their savings to Egypt for free.


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