Egypt to hit 8% growth rate in 2021/2022: Prime Minister

CAIRO – 2 May 2019: Egypt targets to gradually raise economic growth rate to 8 percent in 2021/22, up from 5.3 percent in 2017/2018 and enhance private investment role in pushing the growth rate through continued efforts to improve business environment, Prime Minister Mostafa Madbouli said.

Madbouli stated at the Arab Economic Forum held in Beirut that Egypt started reaping the fruit of the reforms and efforts exerted during the recent period.

He said that the most significant results included achieving the highest annual growth rate in 10 years amounting to 5.3 percent in 2017/2018 and the 12.7 percent-increase of non-petroleum exports to $17 billion from $15 billion.

He added that the balance of payment also recorded a surplus of $12.8 billion and foreign reserves rose to $44 billion in February 2019 from $14.9 billion in June 2014 to cover eight months of commodity imports compared to the previous three months.

According to Madbouli’s speech, efforts to improve the business environment includedautomating procedures for the establishment, simplification and cost reduction of companies;the expansion of free zones and the establishment of 12 new investment zones.
He also referred to the establishment of a comprehensive platform to stimulate the entrepreneurial environment through four pillars: finance, qualification of entrepreneurs, service centers of entrepreneurship, new legislative and regulatory reforms, as well as continuing to update the investment map and update investment opportunities data. This will reflect on the attraction of private investments estimated at $200 billion over the next four years and a net inflow of foreign direct investment of about $47 billion.

Madbouli further pointed out to the government’s keenness to boost the competitiveness of the industrial sector to raise the sector’s growth rate from 6.3 percent in 2018/2019 to 10.7 percent in 2021/2022 through offering industrial lands at competitive prices, simplifying the procedures of industrial licenses and expanding integrated industrial complexes by establishing 13 new complexes.

The prime minister noted that all these exerted efforts to improve the business environment primarily target providing around 900,000 new job opportunities annually, pointing out that 4 million jobs have been provided during the last four years, which contributed to lowering the unemployment rate to 8.9 percent.

Madbouli pointed out that the promotion of innovation and the development of the business environment form the most important way towards the effective integration of the Egyptian economy into the global economy.Therefore, the Egyptian government is seeking to participate in the Fourth Industrial Revolution.

Regarding the governmental initial public offering program (IPO), he said that his government seeks to offer 23 public companies on the Egyptian Exchange (EGX) during 24 and 30 months, with total expected proceeds of $4.5 billion in the first phase, a market value of $2-3 billion and offering rates ranging between 15 and 30 percent.

Mabdouli also talked about the establishment of the State’s Sovereign Wealth Fund to manage and make use of the state’s assets with an authorized capital of LE 200 billion and a paid capital of LE 5 billion. He noted that the government aims to make this fund one of the effective mechanisms to boost mutual investment with sovereign funds and international financial institutions, pumping capitals and finance projects to achieve sustainable development.

The prime minister said that funding directed to start-ups in Egypt rose to $67 million during last year, compared to $36.9 million, according to Patrick Africa website, adding that the existing funding gap between Egypt and other regional countries is about to be filled.