Back to the complete issue
Sunday, 28 February 2021

Egypt’s private sector will lead growth in five years

Private sector investments will take the lead in Egypt’s economy within five years, by which time public investments will be gradually tapered off, Prime Minister Moustafa Madbouly said at a webinar hosted by AmCham and the Egypt-US Business Council on Thursday. Over the next 3-5 years, the government will continue to invest heavily in the economy, with an eye to attract investments and help the economy stage a post-covid recovery, Madbouly said. After that phase is over, the private sector will be given the reins.

In the meantime, the government knows where it wants private businesses to invest: In addition to a portfolio of unspecified projects cabinet will outline for the private sector in the coming period, Madbouly called on businesses to invest in national projects and initiatives, including the EGP 500 bn Decent Life initiative.

The private sector continues to lag behind other areas of the economy: The need for more private sector involvement in the economy was made clear in a World Bank/International Finance Corporation report last year that said that private businesses are yet to feel the benefits of the government’s economic reform program. Although the private sector accounts for some 70% of the country’s GDP, private investment continues to lag behind historical averages and FDI inflows remain low by international standards, the bank said.

One indicator: PMI data shows that private sector business activity outside the oil and gas sector has grown in only five months over the past three years.

The large presence of state-owned enterprises, the presence of tariff and non-tariff trade barriers and a slow and inconsistent court system were all among the biggest impediments to meaningful private sector growth the World Bank identified.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.