(Photo from Al-borsa News)
By Ayat al Battawy
Political and economic pressures have not stopped the African Development Bank making funding available for investors in Egypt, Tarek Ammar, project finance expert for the African Development Bank and the African Development Fund says.
In a statement to Al-Borsa, Ammar said the volume of funding made available by the Bank for projects was based upon the country’s risk assessment, obstacles to development, investment climate and credit rating. These factors shifted with the changes in the political and economic landscape of each country.
The country was suffering from a breakdown in the security sector which discouraged foreign investors from doing business in the Egyptian market, in spite of the large investment opportunities.
He stressed the need to encourage public and private partnerships in a manner that would allow the Egyptian economy to better mobilize funding. There was also the added need of shortening implementation time while still absorbing and employing the surplus workforce in the labour markets.
According to Ammar, economic growth in Egypt has been described as unremarkable by many because of the considerable income disparity gap. Despite the economy continuing to grow, Egypt needed a stable policy platform and to tap into its labor and productivity potential. It also needed to address pressing challenges including unemployment rates, increases in food prices and high rates of poverty.
Ammar believes that it is paramount that laws be issued which provide a favorable climate for financing small and medium sized businesses, a sector vital to the Egyptian economy and which absorbs about 80% of the labor market.
He revealed that Egypt was one of the leading countries in the region in terms of receiving loans and that these loans were large compared to the rest of the region.
Ammar explained to Al-Borsa that everyone was optimistic about the future of the Egyptian market, despite the obstacles inherent in the current political landscape.
Egypt must utilize its resources and thus get the wheel of production turning again. This would help bring the country out of the transitional phase as it has with other similar countries facing similar conditions in the past.
