As the global economy faces a significant downturn, funds in Egypt are looking to bolster the start-up ecosystem to ensure innovative firms are supported, said Oxford Business Group (OBG).
OBG added that Egypt’s digital start-ups were in a good position to respond to the pandemic. According to a January 2020 report from data platform MAGNiTT, Egypt was responsible for the highest number of start-up financing deals in the Middle East and North Africa (MENA) region last year. The country accounted for a total of 141 deals (25% of MENA’s total) attracting $98.6m in funds.
While the pandemic creates significant headwinds across the economy, several funds are seeking to build on the strong track record of the digital sector.
“Technology is having a significant impact on how businesses operate. For example, fintech has disrupted Egypt’s banking sector, and will continue doing so despite COVID-19,” Mervat Soltan, Chairperson of Export Development Bank of Egypt, told OBG.
“With 100% mobile penetration – 60% of which is via smartphone – there is a real opportunity for technology to help address broader economic issues, such as the informal economy and challenges to financial inclusion,” she added.
OBG further noted that the Egyptian government is using modelling in an attempt to predict a trajectory for the containment of the virus. Estimates place the likelihood that containment will be achieved by June at 20%, by September at 50%, and by December at 30%.
While an economic downturn looks probable, Egypt looks set to be the only country in the MENA region to avoid recession in 2020, according to the International Monetary Fund. The organisation forecasts the country’s economy will grow by 2% this year.
