Egypt’s Minister of Finance Mohamed Maait affirmed that the Egyptian economy has become more capable of a “green recovery” despite the severity of global challenges, as it has gained a degree of solidity that enables it to deal positively and flexibly with international crises.
The minister’s remarks came on Wednesday on the side-lines of his participation in the meetings of the International Monetary Fund (IMF) and the World Bank (WB) in Washington.
He added that the economy can withstand these international shocks in a way that pushes the country to continue carrying out structural reforms with a strong political will, settle industry and rely on local production, and target more development investments — especially in green projects, including green hydrogen — by working hard to enable the local and foreign private sector to lead the locomotive of sustainable and job-rich economic growth in order to provide one million jobs annually.
Furthermore, he explained that the state is achieving this by launching the State Ownership Policy Document, which opens new horizons through which the country can attract foreign direct investments worth $10bn annually over the next four years in a way that contributes to achieving sustainable development, improve the standard of living of citizens, and upgrade the services provided to them.
Maait added that net foreign direct investment flows have risen to their highest rate in 10 years, amounting to about $8.9bn in FY2021/22 — a growth rate of 71.4% from the previous FY.
Additionally, the minister said that the very serious challenges arising from the intertwining of the negative effects of the coronavirus pandemic and the unprecedented consequences resulting from the war in Europe require the international community to cooperate more to overcome the current and potential economic risks in a way that helps support emerging economies by giving a greater role for international development partners to provide concessional finance, especially in light of the expectations of the IMF and the WB to slow global economic growth.
He also explained that the Egyptian government is dealing in a more flexible way with the highly complex repercussions of the global economic crisis by relying on a balanced approach between achieving financial discipline and expanding the umbrella of social protection for the neediest groups.
This is done by raising the efficiency of public spending and rearranging priorities in order to contain shocks in an appropriate manner. It also helps to avoid severe economic risks and ensures the preservation of the state’s safe economic path, pointing to the allocation of an exceptional package of about EGP 135bn and the start of disbursing an exceptional aid package to 9.1 million vulnerable families for a period of six months.
This is in addition to the Takaful and Karama programme that covers about 20% of citizens and the state’s efforts to improve the wage and pension structure.
This contributes to alleviating the burdens on citizens as much as possible and reducing the unprecedented inflationary effects of the war in Europe.
Moreover, the minister explained that the country has adopted proactive policies to adapt to external shocks, maintain stable financial performance, and support social protection programmes to stay on the developmental path.
“During the last fiscal year ending in June 2022, we succeeded in achieving a growth rate of 6.6%, a primary surplus of 1.3%, and reduced the total deficit to 6.1% of GDP, bringing the debt rate of budgetary instruments to 87.2% of GDP, and we aim to reduce it to 75% by 2026,” said Maaid.
The minister also indicated that there are a number of vital sectors that have achieved good performance despite the unprecedented challenges that the global economy is witnessing, as the Suez Canal achieved its highest revenue, recording $7bn, and the oil sector recorded surpluses of about $5bn.
Meanwhile, the country’s exports of natural gas per month recorded $600m, with the minister noting that the government aims to increase it to $1bn by January, in addition to an increase in non-oil exports by 30% annually.
