AfDB approves of new $131M loan to boost economic resilience

Cairo – November 29, 2023: The African Development Bank (AfDB) recently approved a new loan to support the government’s efforts in further developing its economic resilience and meet its green transition goals.

The $131 million loan, named the Private Sector Development and Economic Diversification Support Program, aims to “promote private sector development and economic diversification”.

The bank explained that Egypt had implemented “substantial efforts to mitigate the impacts of the COVID-19 pandemic and Russia’s invasion of Ukraine on the domestic economy and preserve resilience,” highlighting its commitment to launching “appropriate mid- to long-term measures” through private sector development, economic diversification, and green transition.

The new financing looks to bolster Egypt’s efforts in implementing various reforms, improving the business environment, fortifying competition frameworks, diversifying its transition to a greener economy and sources of green growth, as well as enhancing promoting key productive sectors such as manufacturing and agribusiness.

According to the bank, the fresh funding is expected to increase private investment from 3.3 percent of GDP in 2021/2022 to 4.3 percent in 2024/2025, and boost Egypt’s manufacturing sector’s value to 17 percent of the GDP by 2025.

The AfDB loan will help Egypt’s goal of attracting $3 billion in financing by the year’s end to bridge a $17 billion financing gap over the next 4 years.

Finance Minister Mohamed Maait previously shared in July that Egypt was expecting fresh funds from partnerships with the AfDB and the Asian Investment International Bank (AIIB) to help curb the ongoing foreign currency shortage.