OECD, Egypt cooperate on 21 projects within 2nd phase of National Structural Reform Programme

CAIRO – 17 October 2023: Egypt and the Organization for Economic Cooperation and Development (OECD) announced Tuesday the country programme, which was ratified in October 2021 and launched in September 2022 to consist of 21 projects.

OECD Secretary General Mathiass Cormann stated that the projects aim for creating more employment opportunities; enhancing the business environment; bolstering digital transformation; promoting innovation and AI technologies; encouraging the adoption of AI responsible use principles; and, pushing forward governance and anti-corruption.

Cormann described the progress Egypt accomplished in many areas of economic reform as "impressive." He added that Egypt had been a top player in terms of capacity building among 19 countries having programmes with the OECD in the MENA region.

Minister of Planning and Economic Cooperation Hala al-Said stated that Egypt had selected the OECD to cooperate with, given its extended experience with structural reform. It is noted that cooperation between the country and the organization dates back to 2005.

The minister presented some pre-pandemic indicators on Egypt's economic performance after the last economic reform programme that began in 2016. In FY2019/2020, economic growth recorded 5.6 percent and FDI inflow increased by 19 percent. Also, expats' remittances rose by 13 percent.

On the other hand, the unemployment rate dropped to 7.5 percent, down from almost 12 percent in 2017, while that of inflation fell to five percent, down from over 30 percent in 2017. Further, the budget deficit to GDP was lowered to 8.2 percent down from almost 10 percent in 2017.

Minister Said highlighted that Egypt had begun implementing the second phase of the National Structural Reform Programme, and that its pillars were efficiency of the labor market; boosting private sector investments; enhancing financial inclusion and access to finance; improving governance; and boosting human capital development.

The minister underlined that the leading sectors in the Egyptian economy are agriculture, manufacturing, ICT, tourism, and logistics. With regard to the agricultural sector, the government targets to elevate Egypt's rank on the Global Security Index to 50 in 2024 up from 77 in 2022. It is noted that the sector contributes by 19 percent in the labor market.

As for the manufacturing sector, it contributed to the GDP by 11.7 percent in FY2021/22 - growing by 10 percent - and the rate is targeted to be 15 percent in FY2023/24. Regarding its share in employment, it was 12.5 percent in 2022, and is targeted to be 18-20 percent in 2024.

The planning minister shed light on the fact that SMEs provide 43.1 percent of jobs in the Egyptian economy. Their share in exports was 10 percent in 2020, and it is targeted to be 20 percent in 2024.