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Wednesday, 4 July 2018

Madbouly emphasizes continuity as he unveils four-year agenda at the House of Representatives

Prime Minister Mostafa Madbouly presented his cabinet’s new four-year policy program to the House of Representatives yesterday, according to an official statement. The new cabinet’s agenda will focus on five main areas: Economic development, improving living standards, human development, as well as national security and foreign policy. You can view the full program here, courtesy of Ahram Gate, or read the cabinet’s summary here.

On the economic front, ministers have set targets for FY2021-2022 that include:

  • GDP growth rate of 8%, up from 5.4% in FY2017-18;
  • Overall budget deficit of 6% of GDP;
  • Primary budget surplus of 2% of GDP;
  • Sovereign debt level of around 80-85% of GDP;
  • Industrial growth rate of 10.7%, up from 6.3% in FY2018-19;
  • Unemployment rate of 8%, down from a current 10.6%;
  • Increase in overall government earnings to reduce reliance on local and external borrowing;
  • Higher tax income as a result of improved collection;
  • Securing USD 2 bn in funding from international institutions for infrastructure development;
  • Securing EGP 200 bn in funding from regional and international sovereign wealth funds and putting under-utilized states assets to use.

The private sector is key to hitting these targets, according to Madbouly, who said that private businesses in Egypt create some 900k jobs a year on average. That’s why his government will be working to support the private sector — particularly youth-led and small businesses — over the coming four years with initiatives including:

  • Establishing 13 industrial complexes across the country;
  • Bailing out idle factories;
  • Allocating 10% of available land to youth and SMEs;
  • Increasing the amount allocated to the central bank’s SME financing initiative;
  • Making EGP 10 bn available for banks to give out as loans to SMEs;
  • Creating 20k job opportunities at small and micro enterprises through a local development fund for women and youth.
  • Allocating EGP 250 mn to a family planning program that seeks to curb population growth, emphasizing that “two is enough.”

Energy policy: Diversification is the name of the game. Priorities here include connecting more households to the national gas grid, focusing on the diversification of energy sources (with a focus on renewables), continuing exploration activities in the Red Sea and East Mediterranean, and capitalizing on surplus production through investments in new petrochemicals and refining projects.

Improved living standards are a focal point of the new policy program. The government will be focusing on closing the “development gap” between governorates, and promises that citizens should begin to feel real lifestyle improvements in the coming months thanks to a combination of past and ongoing reforms, including:

  • Pressing ahead with social housing and infrastructure projects, with an emphasis on roads, high-speed trains for cargo and passenger transport, as well as sanitation and water projects;
  • Expanding the Takaful and Karama cash-payment welfare programs;
  • Create 100k jobs for youth and women in rural areas through programs including expanded support for microfinancing;
  • Moving along with projects such as the Sinai and Upper Egypt development plans;
  • Expanding the social safety net and consolidating subsidy rolls to ensure that subsidies are not being misallocated;
  • Establishing logistics centers nationwide to support the state’s food commodity program.

Health and education are at the heart of the Madbouly Cabinet’s human capital development goals. Priorities here include the launch of the Universal Healthcare Act in Suez Canal cities in the fall and an ambitious education reform program that will not only introduce new K-12 curricula and testing systems, but also see a more concerted effort to improve conditions for teachers. The government will also focus on improving the global ranking of Egyptian universities, largely through collaborations with other international universities, some of which (such as Liverpool University, most recently) have been looking to set up campuses in Egypt.

Egypt will adopt a GCC-style model of water security: The Madbouly Cabinet is planning to plant 1.1 mn feddans somewhere in Africa as part of the food and water security strategy under its national security agenda. Madbouly also framed the move as part of Egypt’s strategy to re-engage with Nile Basin countries.

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