The World Bank (WB) announced a new programme with $1bn to support the second generation of Egypt’s reform programme, which will focus on developing the private sector while enabling inclusive growth.
The new fund will promote small businesses—the country’s largest source of jobs—while improving the competence of local governmental institutions in order to deliver services to their citizens and direct domestic development, according to a statement from the WB.
The ‘Private Sector Development for Inclusive Growth’ development policy financing (DPF) programme will help finance the government’s own economic development programme: ‘Egypt Takes Off.’
The programme is designed to support three of the government’s key objectives: job creation; improving government performance, and raising living standards, noted the statement.
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 payment, along with opportunities to bid for government contracts, while empowering domestic governorates and districts for local investment planning.
‘’Our aim is to create increased and improved opportunities for Egyptians, and our partnership with the WB has helped us make steady progress toward that goal, ‘’ said Sahar Nasr, Egypt’s minister of international cooperation, who also represents Egypt on the WB’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,” noted Nasr.
The new DPF will build upon the results of a multi-year bank development policy financing programme which ended in 2017. Economic growth—a sign of the impact of the reform programme—has climbed from 4.2% in 2017 to 5.3% in 2018, and is expected to reach 6% next year, said the statement.
Reforms in the energy sector have made the supply of electricity to businesses and people more reliable, attracted over $15bn in foreign direct investment, and freed up public funds for the quadrupling of the country’s national 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,” added Msadek.
The World Bank finances programs and projects to help Egypt reduce poverty and boost shared prosperity while 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 $6.69 bn.