CAIRO – 12 November 2024: Egypt has allocated 57% of its concessional financing and development investments to the private sector, with a significant portion directed towards the banking and finance industries since 2020. This approach has enabled Egyptian banks to increase support for small- and medium-sized enterprises (SMEs) and expand green financing initiatives, in alignment with the country's shift towards a more sustainable, green economy.
At the 18th annual People and Banks economic conference, Dr. Rania Al-Mashat, Egypt’s Minister of Planning and Economic Development, emphasized the critical role of private-sector engagement in the country’s broader economic strategy. The conference brought together key policymakers, financial leaders, and industry experts to discuss the evolving challenges and opportunities facing Egypt in a changing global economic landscape. Al-Mashat stressed that fostering private-sector growth, particularly through innovative financing mechanisms, is central to Egypt’s efforts to address its economic challenges and sustain long-term development.
In her address, Al-Mashat outlined Egypt's commitment to navigating the pressures of a shifting global economy. She pointed to the inadequacies of the current international financial system, particularly in addressing the needs of developing economies, which have been compounded by recent global crises, including health emergencies, economic disruptions, and geopolitical tensions. These crises have widened the financing gap for developing countries, with annual deficits now estimated between $2.5 trillion and $4 trillion.
To help close this gap, Egypt launched its Framework for Sustainability and Development Finance, a national initiative designed to promote data-driven, inclusive economic policies. The framework focuses on implementing structural reforms, facilitating Egypt’s green transition, and strengthening macroeconomic stability. By enhancing the country's competitiveness and business environment, the government aims to attract investment and build a more resilient economy.
As part of its ongoing structural reform efforts, Egypt has prioritized initiatives aimed at boosting private-sector growth and promoting economic stability. The National Structural Reform Program targets three main areas: enhancing competitiveness, advancing a green economy, and maintaining macroeconomic stability. Al-Mashat highlighted the country’s progress on renewable energy projects and the introduction of Egypt’s first voluntary carbon market as key achievements in the move toward a sustainable and inclusive economic model.
The private sector continues to play a central role in Egypt’s economic development. Al-Mashat pointed out that since 2020, a large portion of Egypt's concessional financing has been directed toward private-sector projects.
Notably, the banking sector has supported a range of green financing efforts, as well as small- and medium-sized enterprises (SMEs). One of the key initiatives in this area is the Green Sustainable Industry Program (GSI), which, in partnership with the European Investment Bank, has allocated €271 million to sustainable industrial projects focused on renewable energy and carbon reduction.
To further support private-sector development, Egypt has introduced innovative financial tools, including the issuance of its first private-sector green bonds in 2021. More recently, a €70 million risk guarantee agreement was signed with the European Bank for Reconstruction and Development (EBRD) to protect SMEs from credit risk, strengthening their ability to access financing.
Egypt has also launched the Hafiz Platform, which provides financial and technical assistance to private enterprises through innovative financing options. The platform aims to increase private-sector involvement in Egypt’s sustainable development initiatives, fostering international partnerships and helping businesses grow.
In addition to supporting established enterprises, Al-Mashat also announced the formation of a ministerial working group to cultivate a vibrant start-up ecosystem in Egypt. This initiative aims to promote entrepreneurship and innovation, with the goal of positioning Egypt as a regional hub for startups and fostering a more dynamic and diverse economy.
Comments
Leave a Comment