Mohamed Maait, Egypt’s Minister of Finance, said that, in implementation of presidential directives, the government is working, through a diverse stimulus package, on economic recovery from the repercussions of the current global crisis, to contain its negative effects. This includes the unprecedented inflationary wave, the supply chains crisis, increased freight costs, or higher prices for goods and services.
Maait explained that great efforts are being made to encourage investment and maximize local production. This is particularly seen in a package of tax and customs incentives that support the national industry. For example, special attention is paid to attracting more investors interested in manufacturing electric cars, with incentive packages, in addition to encouraging other vital sectors such as information technology and digitization and textile industry.
This came in separate meetings with representatives of Morgan Stanley Bank, Bank of America, and Bank of New York, during his participation in the BEBA trade mission in London, in the presence of Nisreen Lashin, head of the Investor Support Unit at the Ministry of Finance.
Maait added that the Egyptian government is also working on improving infrastructure and accelerating the pace of growth, by expanding the participation of the private sector in economic activities. He pointed out that the “state ownership policy” document came to strike a balance between the participation of the private sector and the public sector in economic activity. It stipulates that the state will exit some activities to allow private sector investments to grow, whose contribution is targeted to increase to 50% of the GDP throughout the next three years. He also explained that the coming period will witness offering a number of companies owned by all sectors and state institutions in the stock market to attract more private sector investments.
Maait said that the volume of Egyptian exports of petroleum and non-oil goods amounted to about $43.6bn last fiscal year. On the other hand, remittances of Egyptians from abroad amounted to about $32.5bn, and are expected to rise by the end of this year. Moreover, the revenues of the Suez Canal will witness a remarkable increase to nearly EGP 7bn by the end of this fiscal year. Moreover, tourism revenues are expected to reach $10bn-12bn despite tourism losing 35% of tourism as a result of the declining number of tourists due to the Ukrainian crisis.
Maait stressed that global financial institutions and international financial markets should reduce the cost of green finance to motivate countries to adapt to climate change.
He pointed out that the government aims in the next fiscal year, despite all global challenges, to record a primary surplus of EGP 132bn at a rate of 1.5%, and reduce the total deficit to 6.1% of the GDP, compared to a total deficit of 12.5% at the end of June 2016. It also plans to take the debt rate towards a sustainable downward path to reach less than 75% of GDP over the next four years. “We aim to reduce the debt rate to 84% of GDP compared to 103% at the end of June 2016, and reduce the debt service ratio to 7.6% of GDP, and 33.3% from budget expenditures, along with efforts to diversify sources of funding to reduce the cost of development and extend the life of the debt,” he said.
He explained that the ministry aims to lay the foundations of a suitable environment for rapid economic recovery from the current global crisis, ensuring the completion of the construction and development process and improving the lives of citizens. The new plan allocates EGP 376bn for public investments, with an annual growth rate of 9.6%, to improve services provided to citizens and create more job opportunities, especially for youth, while increasing environmentally friendly projects to 50%.
A previous statement of the Ministry of Finance stated that Minister Maait held a number of bilateral meetings with representatives of a group of international companies and investors, including his meeting with Prakriti Sofat, represented by Golden Man Sachs, and Bob Birch from Fido Communications Technology Company and Pimco.