Climate action, digitalization, entrepreneurship, and empowering the next generation are key themes in 2022, according to Egypt’s Minister of International Cooperation, Rania Al-Mashat.
Daily News Egypt interviewed Minister Al-Mashat to learn about the government’s achievements in 2021, and her ministry’s plans and prospective for 2022. The interview also touched on the development financing that Egypt received last year, and the lessons we learned from the COVID-19 pandemic.
The key themes in 2021 were private sector engagement and green recovery, how far did Egypt reach in these two files?
The global community is collectively working to build back better post the COVID-19, and towards a green and inclusive future. In this context, the political leadership in Egypt continuously affirms the country’s commitment to promote both private sector engagement and climate agenda. This was evident in President Abdel Fattah Al-Sisi’s opening speech at the beginning of COP 26 in Glasgow in November 2021 as he affirmed the urgency of addressing climate change challenges and the critical role that the private sector can play in this arena.
This vision has been translated in multiple sectors through the 2015 Integrated Sustainable Energy Strategy (ISES), which aims to produce 20% of Egypt’s power from renewable resources by 2022, and 42% by 2035. Today, around 20% of our energy production comes from wind and solar energy, as well as hydropower.
Moreover, the country pushed forward the development of sustainable and green transportation networks through the development of the monorail and the upgrading and expanding of the metro lines; connecting people through inclusive transportation while reducing carbon emissions.
Egypt also finalized its “National Climate Change Strategy 2050” which focuses on lowering carbon emissions, increasing reliance on clean energy, and enhancing scientific research.
As the first in the MENA region, Egypt also issued 5-year sovereign green bonds worth $750m which are dedicated to funding green projects. In 2021, the Ministry of International Cooperation announced that the International Finance Corporation (IFC) will invest $100m in Egypt’s first private sector green bond issuance.
As for private sector engagement, the government is committed to adopting regulatory reforms that enhance private sector engagement, particularly in moving towards a green transformation.
For example, since the issuance of the Renewable Energy Law, the private sector has been encouraged to play a role in the country’s green transformation strategy and produce electricity from renewable resources through several partnerships. KarmSolar was the first private solar integrator in Egypt to obtain a licence from the Egyptian Electricity Regulatory Agency. This helped Egypt become one of the leading countries in renewable energy in the MENA region, according to the 2020 Solar Outlook Report.
Moreover, a new law was issued to allow the National Authority for Tunnels (NAT) to establish public-private partnerships to manage and operate electric railways. Also, the Water Resources and Irrigation Law aims to improve the water management, support the recently approved water resources strategy, and encourage private sector participation. The government is now partnering with the private sector to design, build, operate and finance 19 water desalination plants between 2020 and 2025. In addition, the Ministry of International Cooperation secured a total of $4.76bn in finance for the private sector; $3.19bn in 2020 and $1.57bn in 2021.
Moreover, in terms of climate action, the Ministry secured $1.4bn in electricity, renewable energy, and petroleum sectors, and $230m for the environment sector last year, reflected through projects in clean and sustainable transport, and sustainable infrastructure.
Within the Ministry’s current portfolio, there are 28 adaptation projects worth $2.85bn in development financing. These projects are deploying environmentally friendly principles and practices in several sectors; the most prominent of which being the environment, water, agriculture, and irrigation sectors, by enhancing climate-smart agricultural practices and investing in water desalination and wastewater management projects. Also, in the Ministry’s portfolio, there is currently $7.83bn in development financing contributing to 46 mitigation projects. These projects are also incorporating environmentally friendly practices across sectors, particularly energy and transport, such as solar power stations and wind farms, as well as renovating and constructing new metro lines and electric trains to establish a sustainable transport system.
What are the key themes for 2022?
During the closing ceremony of the World Youth Forum, President Al-Sisi announced urgent climate action as a top priority for Egypt ahead of hosting COP 27 in Sharm El-Sheikh this year, alongside the importance of empowering youth, embracing the digital transformation to allow for innovative solutions.
Egypt adopts a green energy transition through mega projects that place the environment as a cornerstone. Today, the whole world is looking to find solutions, through mitigation and adaptation projects, for climate change, and I think it is important to spotlight that we have common but differentiated responsibilities, where all countries should collectively address global climate issues, but not all can be equally responsible due to economic differences.
Another key theme to 2022 that boosts economic development is digitalisation. Going forward, there is also a special focus on entrepreneurship, and empowering the next generation. As per the Ministry’s Official Development Assistance mapped to the SDGs, the ongoing portfolio includes 67 projects that empower and develop youth, worth $3.9bn in several sectors, including digitalization, small and medium enterprises (SMEs), education, entrepreneurship, social protection, and scientific research.
Zooming in on the Ministry’s role, and to foster an innovation-centric atmosphere, we support startups via Egypt Ventures, and through cooperation with development partners. Up until 2021, over 176 startups received investments from either Egypt Ventures or its accelerators (Falak Startups and EFG-EV Fintech), with EGP 150m worth of investments. The total deployed capital since 2017 amounts to EGP 301m, and ever since its establishment, for each $1 deployed by Egypt Ventures, $4 were “crowded-in” from the private sector and development partners. Looking at the accelerators, Falak Startups has graduated 61 startups in 2021, amounting to EGP 31m and EFG-EV Fintech graduated 23 startups, amounting to EGP 35m.
In 2021, we also hosted the #GenerationNext entrepreneurial forum, with Egypt Ventures, bringing together a multitude of innovation and creativity with startups covering fintech, e-commerce, nutrition, health, agriculture, and much more, presenting their work and contributions. During our Egypt – International Cooperation Forum (Egypt – ICF), we’ve also touched on the importance of innovation and a digital transformation, alongside urgent climate action, in last year’s Egypt – ICF.
Egypt – ICF Highlights: https://www.moic.gov.eg/en-US/Sectors/Index?na=6664
How much development finance did Egypt receive in 2021? And in which sectors were they focused? How far do these projects help Egypt in achieving the SDGs?
Committed to transparency and documentation, every year the Ministry of International Cooperation issues an annual report detailing the volume of development financing across the year. For 2021, we titled the report “Engaging for Impact towards Our Common Future” and we reported that $10.27bn in development financing was secured across various sectors. This includes over $8.75bn for financing sovereign projects and $1.57bn in support of the private sector.
The report documents our country-led multi-stakeholder engagement framework by delving into four main areas, people at the core of an inclusive people-powered economy, planet at the centre for accelerating progress towards a green economy, progress to enhance the public-private cooperation, and partnerships to engage for impact in alignment with the Egypt’s national objectives.
In line with the government’s development agenda, the Ministry’s portfolio is focused on enhancing infrastructure alongside the climate agenda, as well as investing in human capital, to increase growth and resilience through projects dedicated to, improving water efficiency and conservation through wastewater management and water desalination projects to ensure water security; upgrading the transportation networks to enhance connectivity and inclusivity through a multi-modal environmentally friendly transport system that supports the country’s goals in decreasing harmful emissions; and establishing renewable energy projects through solar parks and wind farms towards a green transformation through clean energy.
The aforementioned sectors include $.2.95bn secured for infrastructure and environment, in line with the green transformation. As for investing in human capital, with the people-powered agenda as a mindset, the Ministry secured $2.4bn in development financing for social sustainability, including several sectors such as, health, gender equality, education, agriculture, empowerment for rural youth, and MSMEs.
We mapped the current portfolio of projects which make up for 372 projects worth $26.5bn to the UN SDGs. This mapping revealed that in 2021, more than 60% of the ODA portfolio responds to infrastructure projects, addressing SDG 9: Industry, Innovation, and Infrastructure with 35 projects worth $5.9bn, SDG 6: Clean Water and Sanitation with 39 projects worth $5.3bn, SDG 7: Affordable and Clean Energy with 30 projects worth $4.6bn, and SDG 11: Sustainable Cities and Communities with 33 projects worth $1.8bn. Moreover, the ODA-SDG mapping supports in making informed and evidence based policies and decisions.
Visit “Mapping Our Impact”: https://www.moic.gov.eg for more information through our interactive map.
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Currently, there is emphasis on urgent climate action. In that light, and ahead of hosting COP 27 in our city of peace in Sharm El-Sheikh, we are also committed to SDG 13: Climate Action, where in cooperation with development partners and line ministries, the Ministry of International Cooperation is providing $11.9bn covering 85 projects in adaptation and mitigation; this includes both mega infrastructure and investing in human capital projects, encompassing energy efficiency, sustainable agriculture, wastewater management and desalination projects, renewable energy, and sustainable cities and transport.
The below includes the breakdown of the development financing secured across 2021:
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Report Highlights on the website (English): https://www.moic.gov.eg/en-US/Sectors/Index?na=7391
Report Highlights on the website (Arabic): https://www.moic.gov.eg/ar-EG/Sectors?na=7391
To Print the Report (English): https://www.moic.gov.eg/getattachment/17119c3e-d535-468e-adb5-52e429a71ff3/english-moic-report-2021-digital-single-pages.pdf
To print the report (Arabic): https://www.moic.gov.eg/getattachment/3f9376d2-cf87-4a2d-8fa1-7cae5b2b1d67/arabic-single.pdf
What are the Ministry’s plans for 2022 in terms of financing development?
The Ministry of international Cooperation is aligning country strategies with development partners consistent with the SDGs. In 2021, the Ministry launched an inclusive process to engage all national stakeholders in the formulation of Egypt’s country strategies with several development partners including the United Nations, the World Bank Group (WBG) the European Bank for Reconstruction and Development (EBRD), the African Development Bank (AfDB), the European Investment Bank (EIB), and the USAID, among many others.
The United Nations Sustainable Development Cooperation Framework (UNSDCF) was established in accordance with the planning framework for collaboration between the UN System in Egypt and the Government of Egypt for the years 2023-2027; formulated through the coordinated efforts of government officials, in an inclusive process that brought together 30 government institutions and 28 UN agencies (resident and non-resident) within both the national and joint consultations, for the first time.
Similarly, the draft of the 2022-2027 Country Strategy with the EBRD was also completed in 2021, affirming the bank’s constant commitment to finance projects of the public and private sectors, in order to support Egypt’s development efforts. The new strategy supports the Government of Egypt’s efforts to promote a more inclusive economy for Egyptian businesses, women and youth; to accelerate Egypt’s green economy transition, and to help the country realize its full competitive potential by supporting private sector growth and strengthening governance.
Also in 2021, national consultations with the AfDB were launched to prepare the new Country Strategy 2022/2026, within the framework of the series of discussions the Ministry of International Cooperation holds in coordination with relevant national entities.
Additionally, last year the Development Policy Finance Framework focused on structural reforms was signed with the World Bank and the Asian Infrastructure Investment Bank. It supports the country’s efforts towards fostering inclusive, green and digital growth, through three main pillars; 1) Enhancing Macro-Fiscal Sustainability, 2) Enabling Private Sector Development, 3) Fostering Women’s Economic Inclusion.
Moreover, and in line with the country’s objectives, promoting the role of private sector engagement and building on successful partnerships with international development institutions and banks is key to closing the development financing gap and the climate financing gap through blended finance, green finance, and innovative financing tools; all of which open the doors to new job opportunities and economic growth. This was highlighted by President Al-Sisi during the World Youth Forum (WYF) in a session with the development partners.
One of the ways the Ministry ensures continuous alignment with national objectives is by hosting Multi-stakeholder platforms, bringing everyone together, for an effective, agile and solution driven dialogue. The Multi-Stakeholder Platforms held in 2021 provided an opportunity of ensuring complementarity, and achieving value-centric results that are formed through interactive conversations with all stakeholders. Garnering 800 total participants, and bringing in over 80 potential opportunities and more than 42 requests for collaboration, we have organized several multi-stakeholder platforms throughout the year; including in microfinance, private sector, renewable energy, human capital, digitalization and ICT, and agricultural development and food security.
In your opinion, what are the lessons that the world and Egypt learned from COVID-19?
The COVID-19 health crisis has taught us that global problems require global cooperation, alongside agile policymaking. Even if every country was hit differently by the pandemic, no one was left isolated. Through collective cooperation, we are rebuilding and recovering with resilience in the backdrop of the pandemic, as resilience is our ability to withstand, adapt to, and recover from the disruptions caused by the crisis. It is also our only way to remain relevant, and accelerate progress towards building back better; a sentiment that was reiterated several times during the Egypt – ICF.
While flattening both the health curve, and ensuring economic growth despite challenges, the silver lining to the COVID-19 pandemic is that the government managed to expedite and push through with many of the planned structural reforms, related to social safety nets, financial inclusion, and digitalization, accelerated by the pandemic that helped bring the goals to the fore, reflecting that reform is a continuous process.
Another aspect that we are taking forward in 2022 is urgent climate action and emphasis on digitalization; both of which are necessary for building back better. The pandemic has spotlighted the need and importance of digitalization, alongside the importance of adaptation and mitigation projects for climate change, as previously mentioned.
What role should the international institutions now play to accelerate the countries’ recovery from the repercussions of COVID-19?
There are three words that are essential when discussing recovery from the pandemic; green, resilient and inclusive. The COVID-19 pandemic created the urge to foster more effective and agile multilateral cooperation, in order to address global challenges through harmonized cooperation towards sustainable development.
In terms of a green recovery, international partnerships and collective action is much-needed in addressing climate change and its consequences in order to achieve a green transition and to build resilience to climate change. This requires stakeholders and international institutions to mobilize finance and technical support reflecting the common but differentiated responsibilities across countries, to accelerate climate action, via green finance for instance.
Embracing resilience, the pandemic has unveiled the importance of digitalization and education for the “jobs of tomorrow”. Through partnerships and global cooperation, there are vast opportunities to enhance accessibility to digital technology and to equip people with the necessary digital skills to strengthen entrepreneurial capacity, through investments in ICT infrastructure and in innovation and entrepreneurship via the private sector and startups.
It is also important to acknowledge that inclusivity is part and parcel of being able to build back better. By investing in human capital, through gender equality, and by empowering youth, these are keys to long-term sustainable growth. The economic inclusion of women is pivotal for sustainable growth and for expediting socioeconomic recovery post COVID-19. This is alongside ensuring inclusive transportation and inclusive workplaces, alongside access to digital technologies and equal education opportunities.
These key themes were also highlighted in the Cairo Communiqué, issued at the end of the Egypt – ICF, providing a set of recommendations outlining the importance of multilateralism, South-South and Triangular Cooperation, the 2030 Agenda, private sector engagement, climate action, digital trade, digital transformation, food security, and investing in human capital. The 9-section Cairo Communiqué offers a blueprint for an inclusive, green post-COVID recovery for the global economy, providing a raft of 38 recommendations for international policymakers under several key themes.
Cairo Communiqué: https://www.moic.gov.eg/getattachment/aff03ed6-d8bb-43c5-b8f6-425ae3ee065a/draft-communique-01-copy-2.pdf
What are the Egyptian government’s plans to ensure the economy is not negatively affected by COVID-19 in 2022?
Between 2016 and 2019 when Egypt had adopted its own home-grown economic reform programme, this led to a positive impact, and pushed for monetary, fiscal, and structural reforms, paving the way for macroeconomic stability and sustainable growth. Also during 2022, the government launched the second phase of its structural economic reform programme that will support economic growth rates. The second phase focuses on several areas including industry, agriculture, telecommunications and information technology, alongside developing the business environment, and increasing the role of the private sector.
The Egyptian economy’s resilience has been applauded by many international institutions such as the World Bank, the EBRD, and the IMF for achieving positive economic growth rates in the past year, despite global challenges. It is predicted that the economy will continue to grow in the coming years, paving the way for a return to pre-pandemic levels. This is primarily due to the ongoing major national projects that are being implemented that were essential in improving people’s livelihoods as well as in enhancing business environments, reflecting commitment to the national agenda and the SDGs.
The World Bank’s January 2022 “Global Economic Prospects” raised its forecast for the growth of the Egyptian economy to 5.5% in fiscal year (2021/22), compared to the initially predicted 4.5%. This is due to “external demand from major trading partners, expanding information and communications technology and gas extractives sectors, and a gradual improvement in tourism.”
Reference:https://openknowledge.worldbank.org/bitstream/handle/10986/36519/9781464817601.pdf
In July 2021, Egypt ranked 4th with an index of 88.7 in The Economist’s “normalcy index” tracking behavioural change due to the COVID-19 pandemic, representing the country’s agility and resilience in its ability to withstand the impact of the health crisis, all while maintaining commitment to its own 2030 national agenda and the SDGs. In the same index’s more recent version, published in January 2022, Egypt ranked first at 107.4.
Reference:https://www.economist.com/graphic-detail/tracking-the-return-to-normalcy-after-covid-19
The London School of Economics published the book “Stakeholder Engagement through Economic Diplomacy” in 2021. How did it help in promoting knowledge sharing between emerging economies, mainly African countries?
The book documents Egypt’s pioneering experience in upholding economic diplomacy, in maximizing socioeconomic benefits, in ensuring the alignment of development financing to the national objectives, and in enhancing international cooperation for efficient progress.
It also outlines the steps to a multi- stakeholder approach:
First, by creating a country-led multi-stakeholder platform to enable and facilitate a constructive, inclusive and transparent dialogue with all partners supporting socio-economic objectives.
Second, by designing and implementing a mapping exercise to align the results of international development cooperation projects in the country with the objectives of the SDGs.
Third, by employing a global partnerships narrative, which offers a common language of communication for stakeholders to unify development efforts between the country and its development partners.
Highlighting how the successful implementation of these principles can produce powerful synergies, as the book offers a strong basis for future interventions and decisions on fund allocation towards fulfilling the 2030 Agenda.
In mapping the ODA to the SDGs, there were two main methods: a broad sectoral mapping methodology and a more detailed project- based mapping methodology which includes two approaches; single SDG mapping which identities the primary SDG towards each project, and multiple SDG mapping which accounts for multidimensional linkages projects can have to several SDGs. Ensuring optimal contribution to development cooperation, the mapped portfolio also includes both financing to sovereign projects as well as financing to the private sector, and also accounts for projects implemented by the UN and its agencies. This initial idea of mapping the SDGs was created by the Organisation for Economic Co-operation and Development (OECD) as a way to serve as a GPS, measuring distance towards the global goals.
Through the mapping process, development partners and the Government of Egypt are able to make data- driven decisions based on the documentation of development financing to the SDGs. The comprehensive approach also showcased the multidimensionality and interconnectedness of the global goals, the power of international cooperation in ensuring strategic development, and how development cooperation must be pursued in a structured way. In the same light, the ODA-SDG mapping is replicable, and our experience provides a practical template for other countries, contributing to the successful transition to a new, global and equitable economic system.
To Download the Book: https://www.lse.ac.uk/africa/Events/Public-Events/Policy-Reform-Rania-Al-Mashat
On our website as well, we created an interactive map showing the ODA-SDG mapping; underscoring the distribution of country-led projects nationwide in different sectors. The ODA-SDG interactive map enables users to be well informed of the direct impact of the Government of Egypt’s projects financed by bilateral and multilateral development partners across various sectors of development. Launching this map came within the framework of the Ministry’s commitment to enhancing transparency and governance of the development financing, as well as to raise people’s awareness on the state’s efforts, as part of the international partnerships framework.
ODA- SDG Interactive Mapping under “Mapping Our Impact”: https://www.moic.gov.eg
You participated in the launch of Egypt’s version of the UN Initiative “Shabab Balad”, could we talk in-depth about this initiative?
Egypt is a regional powerhouse for innovation and creativity due to our dynamic and young entrepreneurial ecosystem. During the launch of the Egyptian version of UN Generation Unlimited “Shabab Balad” initiative at the World Youth Forum, held under the auspices of H.E. President Abdel Fatah Al-Sisi, we discussed the government’s commitment to public-private youth-partnerships (PPYP) focused on education, employability, entrepreneurship, and engagement
Incorporating our youth in the Egypt Vision 2030 is necessary as 58% of the population is under the age of 30, and the fact that the launch of this initiative took place during the World Youth Forum reflects the exchange of information and effective communication between youth and decision makers and the country’s commitment to innovation and creativity, alongside enhancing the participation of youth in development efforts.
Additionally, Egypt is the first country in the region to witness the launch of this initiative after its launch by the UN in over 50 countries across the world, aiming to support empowering youth. As per the Ministry’s Official Development Assistance mapped to the SDGs, the ongoing portfolio includes 67 projects that empower and develop youth, worth $3.9bn in several sectors, including digitalization, Small and Medium Enterprises (SMEs), education, entrepreneurship, social protection, and scientific research.
