Faced with the novel coronavirus (COVID-19) pandemic, the Egyptian economy has demonstrated resilience, strength and agility.
The national economy, which expanded by 3.5% in 2020, was one of few in Africa that posted positive growth for the year. Indeed, Egypt has weathered the crisis well due to its macroeconomic stabilisation, and recent efforts to enhance health, education, and economic diversification outcomes.
At the same time, the pandemic has accentuated pre-existing vulnerabilities in many economies across the globe, halting and in some cases undoing significant progress made over the past years.
Egypt’s economy has also been deeply affected, with trade and supply chains disrupted, and tourism and other industries hard hit. Still, as we look forward to the future, we do so with confidence, hope, and a sharper focus.
Rebounding from the pandemic presents an opportunity to tackle some long-standing structural weaknesses and to rebuild faster and stronger.
A more inclusive Egypt is one that continues to improve the living conditions of its citizens. Micro, small and medium-sized enterprises (MSMEs) dominate the country’s private sector, and employ nearly 80% of the country’s working population.
Working alongside the Egyptian authorities since 2004, the African Development Bank (ADB) has supported MSMEs and promoted entrepreneurship by offering financing, training and technical assistance to businesses and entrepreneurs.
We will continue working with the Egyptian Government to strengthen the business environment, and facilitate access to financial and non-financial support for MSMEs, thus helping to accelerate recovery from the COVID-19 crisis.
Our goal is to unlock the private sector’s potential to create wealth and jobs, and to help all Egyptians achieve their aspirations for a dignified and decent life. In particular, the youth are an asset with great potential. Together, we will create new opportunities for inclusive, youth-driven growth in Egypt.
Together, we will also ensure that growth delivers financing for women in Egypt as well as opportunities for working populations living in Upper Egypt and remote areas.
In addition, and to complement the government’s efforts to mitigate the pandemic’s impact, we provided a $500,000 emergency assistance grant in 2020 for food relief, and to contribute to restoring the livelihoods of severely affected vulnerable populations.
A more resilient Egypt is one that continues to develop economic infrastructure to foster sustainable growth.In 2020, we provided a $270m budget support loan for Egypt’s electricity sector to bolster economic resilience and sustainability amid the ongoing pandemic.
The Bank is a long-standing partner in the country’s transformational reforms and development of its energy sector. Our support includes financing electricity production in Benban, under the solar Feed-in-Tariff programme, as well as the Ain Sokhna and Suez power stations.
In the water sector, eastern Cairo’s Gabal El-Asfar treatment plant, the largest facility of its kind in Africa and the Middle East, received $58m in Bank funding, and the Abu Rawash treatment plant in Giza $150m.
The two plants are contributing to economic development in the surrounding region, particularly in agriculture by providing treated wastewater to irrigate agricultural land and to produce organic fertiliser.
In Upper Egypt, the Bank is supporting rural sanitation in Luxor governorate with total funding of $120m, to significantly increase access to sanitation services.
A more integrated Egypt is more connected globally and within the African continent. To position Egypt for a swift and sustainable recovery, focusing on strengthening competitiveness and integration into the global economy remains essential.
The Bank has commissioned a study for the Suez Canal Economic Zone (SCZone) on the skills needed for tomorrow’s jobs, with the objective of contributing to securing a suitable workforce for those investing in the zone.
Furthermore, as many world economies turn inward, we see a great potential for closer African integration over the medium term. Despite huge trade and investment opportunities in the region, intra-regional trade in North Africa is among the lowest of any world region (below 5%) and represents an opportunity in itself.
In addition, the prospects for greater cooperation with sub-Saharan Africa are huge. The Egyptian private sector has demonstrated a keen interest in strengthening cooperation between North Africa and the rest of the continent.
This is being bolstered by the coming into force of the African Continental Free Trade Area (AFCFTA), which provides for the elimination of at least 90% of tariff barriers on goods from other African states over a period of 5 to 15 years, and is expected to boost intra-African trade.
We are keen to support the Egyptian government’s strategic efforts in seizing opportunities with other African countries, and we are intensifying dialogue with the private sector to support its investments on the continent.
Egypt’s youthful and educated population, its growing competitiveness, and the potential of its private sector give us reasons to be confident that the country can overcome the COVID-19 crisis. We anticipate that a second wave of bold economic reforms will enable Egypt to emerge stronger and more resilient than before.
In every crisis, there are opportunities. By working together and reinventing our ways of acting and thinking, we will seize them.
Malinne Blomberg, African Development Bank’s Egypt country manager