Egypt faces USD 230 bn investment gap in infrastructure, and most of it is in transportation
Egypt faces a USD 230 bn investment gap in infrastructure over the coming 20 years — and the vast majority of that is in transportation, according to a World Bank analysis. Some USD 180 bn of the projected gap is in transport, while water infrastructure needs USD 45 bn in investment above current baseline projections.
Pay attention to agriculture and energy, too: While the investment gap is significantly lower here, the agriculture and agribusiness sector accounts for 30% of GDP and “has the highest potential for job creation” among the four priority sectors the Madbouly government and the World Bank identified for the study.
Before you get too down, remember: This means massive potential investments. The solution? Empower the private sector, the WB says, and transition from “taxpayer funding to user funding” — with plenty of emphasis on public-private partnerships.
Among the World Bank’s key recommendations by sector:
Transport: A USD 10 bn, 10-year investment plan to rehabilitate the railroad. Also: “Invite the private sector to develop … container and cargo terminals, river transport, railway projects, dry ports, bus rapid transit and light rail.”
Energy: USD 10 bn in fresh investment to upgrade and build new refineries. Also: Build another 3.6 GW in generation capacity right away to “eliminate power outages,” bring the private sector into a liberalized electricity market, and find new ways to promote private investment in renewables.
Agriculture: Improve water management systems and irrigation networks, reclaim more land, develop logistics networks that will sharply cut the massive percentage of crops lost between farm and market, develop the food processing industry through “efficiently located agro-industrial parks” and restructure the Agricultural Bank of Egypt.
Water and wastewater: The recommendations are the most bland here, talking about “fiscal policy reforms to encourage sustainable consumption patterns of water” (we’re reading that as “price hikes”), improved management systems and awareness campaigns.
But all of this will need the government to loosen price controls, stick to a clear policy framework against which businesses can budget and plan — and develop the ability of state institutions to run as full partners of the private sector by improving their abilities to plan and manage bid processes.
The document is more than 100pp long. What should I read? Page 5 focuses on short-term solutions for each sector — it’s essentially a great list of business ideas if you let your mind wander as you read. The World Bank’s recommendations are summarized on pp 15-16.
Visit the landing page for the reportor download the full document here (pdf).