The World Bank announced a new US$1 billion program to support the second generation of Egypt’s reform program, which will focus on developing the private sector while enabling inclusive growth. The new program will promote small businesses, the country’s largest source of jobs, while improving the capacities of local governments to deliver services to their citizens and guide local development.
The Private Sector Development for Inclusive Growth development policy financing (DPF) will help finance the government’s own economic development program, ‘Egypt Takes Off.’ The program is designed to support three of the government’s key objectives of job creation, improving government performance and raising living standards. The DPF is focused on reforms to improve the business environment, with an emphasis on ensuring small businesses have access to finance and new financial technology such as digital payments, along with opportunities to bid for government contracts; while empowering local governorates and districts for local investment planning.
‘’Our aim is to create more and better opportunities for Egyptians, and our partnership with the World Bank has helped us make steady progress toward that goal, ‘’ said Dr. Sahar Nasr, Egypt’s Minister of International Cooperation who also represents Egypt on the World Bank’s Board of Governors. ‘’Small businesses are our biggest source of jobs, and with the support of this project we want to make it easier for people to launch them, especially young people and women in less developed areas.”
The new DPF will build on the results of a multi-year Bank development policy financing program that ended in 2017. Economic growth, a sign of the impact of the reform program, has climbed from 4.2% in 2017 to 5.3% in 2018, and is expected to reach 6% next year. Reforms in the energy sector have made the supply of electricity to businesses and people more reliable, attracted over US$15 billion in foreign direct investment, and freed up public funds for the quadrupling of budget for social safety nets. New industrial licensing and investment laws have created a more hospitable environment for private investment, establishing a momentum that the new project aims to maintain and expand on.
“Egypt has undertaken historical economic reforms over last four years and the priority now is to create jobs for all Egyptians during this next critical phase of the reform program,” said Samia Msadek, Acting World Bank Country Director for Egypt, Yemen and Djibouti. “The focus on improving the availability of finance, developing entrepreneurship and transparency in tax filings and government procurement would help the small and unconnected businesses thrive and create jobs.”
The World Bank finances programs and projects to help Egypt reduce poverty and boost shared prosperity. The new project will complement a broader package of support focused on expanding social protection and social inclusion of citizens, improving competitiveness and infrastructure in less developed regions, developing a digital development strategy for the jobs of tomorrow, leveraging private sector investments for infrastructure, and reforms in the education and health sector to help build human capital. The World Bank currently has a portfolio of 16 projects in Egypt with a total commitment of US$6.69 billion.