Egypt's Prime Minister Mostafa Madbouly said that the IMF-backed economic reform programme Egypt adopted in late 2016 was necessary to save the country's economy.
The tough reforms, which have strained the budgets of millions of Egyptians, include a sharp currency devaluation, deep cuts in energy subsidies and the introduction of a value-added tax.
“This country could have been led to disaster if we hadn’t made these bold economic reforms," Madbouly said in an interview with UK-based foundation Business & Investment.
Madbouly referred to figures including a decline in the unemployment rate to 8.9 percent in the fourth quarter of 2018, as opposed to 12.5 in 2016 before the country began its economic reform process. He also mentioned a spike in Egypt's foreign reserves that stood at $44.5 in November.
Egypt is targeting a gross domestic product growth of 5.6 percent during its current fiscal year.
"For the next year we’ll be working very hard to reach 6 percent," Madbouly said.
"I think this is quite outstanding. I’ve seen a lot of reports showing that Egypt was among the top five growing countries in the world. So, in terms of the economy, things are moving on and we are very determined to continue our economic reform programme in the coming years," Madbouly said in the Saturday interview that was published in an economic supplement of The Washington Post a day later.
Madbouly said the country has been pushing ahead with financial aid and social housing programmes targeting low-income families with a view of reducing poverty rates, adding that human development is the government's new focus.
"Our target now is to really focus on the country’s human resources. We have more than 65 percent of the population below 40 years old, this is a real challenge. The most important thing if you would like to make real positive contributions is to focus on health issues and education.”
“We are now showing the tendency on relying more on women and youth, because we do believe they have their major contribution to make for the country,” he says.
In addition to pushing ahead with its tough economic reforms, Egypt is also introducing measures to boost the role of the private sector and attract foreign investors to spur the economy.
"It’s our target in the coming period as a government to open more doors, make it more conducive and flexible for the private sector, whether from inside or outside the country, to play their planned and major role in the contribution to the growth of the economy.”
“Even if you look at the new fiscal budget that we’re introducing to parliament, the contribution of the private sector in the overall budget and investment is almost around 78 percent. The whole role of the government is about 20 percent maximum, which will continue in terms of infrastructure and paving the way for private sector contribution,” explains the prime minister.
Madbouly said the most important thing at the time being is to work on subsidising exports and boosting the private sector's role in cutting Egypt's trade deficit, which stood at $3.87 billion at end of 2018.
“We are now working very hard with the Ministry of Investment to really overcome any kind of problems facing the investors, whether from the local or the international market,” he adds.
The prime minister said new mega projects launched under the government of President Abdel-Fattah El-Sisi have generated 4 million new job opportunities. These include the Suez Canal Economic Zone that is planned to create an international industrial and logistics hub, a $45-billion New Administrative Capital, development of the national road network and a number of power projects to boost generation capacity.
"We have dramatically and substantially improved the infrastructure, roads, water, sanitation, gas and electricity. We’ve also managed to lower the deficit of housing and other services. We have paved the way for horizontal expansion on desert land,” the prime minister explains.
“This was another challenge that Egypt has faced in the last three or four decades. Targets have been achieved by these mega projects. We now have a good base for the contribution of the private sector, which can make use of all these facilities that we have introduced to boost the economy. This is our belief: that without these kinds of programmes, the Egyptian economy wouldn’t have survived.”