The most recent overhaul of the cabinet, the fourth under Prime Minister Mostafa Madbouly, involved merging certain ministries of the economic cluster in the new Cabinet and introducing new faces for other portfolios.

Egypt is currently engaged in an $8 billion loan deal with the IMF that sets the key policies these ministries will follow through 2027, when the loan programme concludes, and beyond.

Finance portfolio

 

Preserving Egypt’s economic stability, building a more flexible and sustainable future, and increasing the ability to achieve development targets, as well as improving the standard of living of citizens and enhancing the services provided to them are the key priorities over the coming phase, according to the new Minister of Finance Ahmed Kouchouk.

Kouchouk took the oath on Wednesday as the new Minister of Finance, succeeding Mohamed Maait. Before that, he served as the Deputy Prime Minister for Financial Policies.

He said the ministry will do its utmost to alleviate the living burdens on citizens within the state's general budget for the current FY2024/2025, which started on 1 July.

Egypt’s inflation has been in the double-digit zone since the war in Ukraine. Despite keeping its downward path for the third consecutive month, Egypt’s annual headline inflation and core inflation rate recorded 27.4 percent and 27.1 percent in May, respectively, according to the latest calculations announced by the CAPMAS and the Central Bank of Egypt (CBE). These figures are, however, still far beyond the target the CBE set at seven percent (±2 percent) in the fourth quarter of 2024.

Meanwhile, purchasing power dropped to its lowest in the past ten years as the local currency was devaluated four times in almost two years against the US dollar.

Kouchouk added that the path of structural reform of the Egyptian economy will continue to stimulate the growth of the private sector and increase its contribution and role in economic activity as the engine of comprehensive and sustainable development.

“We are working to push initiatives to encourage production and exports, maximize the local component in the industry, and enhance the competitiveness of Egyptian products,” he noted.

In this respect, Kouchouk explained that the ministry is committed to the flexible management of the economic risks resulting from global and regional crises to contain external and internal shocks and limit their impacts and repercussions on the Egyptian economy and citizens.

“We are committed during the current FY2024/2025 to achieving financial discipline by maintaining the registration of a large primary surplus of 3.5 percent of GDP. We are also committed to placing debt and deficit rates on a sustainable downward path while considering a debt ceiling not exceeding 88.2 percent,” he said.

 

Planning, Economic Development, Int’l Cooperation in one portfolio for the first time

 

“We are working following the instructions of the political leadership, and the merger of the Ministry of Planning and Economic Development with the Ministry of International Cooperation makes the work more efficient and effective and reinforces the mechanism for supporting the Macroeconomic environment,” said Rania Al-Mashat, who has now become not only the Minister of International Cooperation but also the Minister of Planning and Economic Development in the new Cabinet.

Al-Mashat took the oath on Wednesday for the new ministerial portfolio that witnessed the merge of the two ministries for the first time in the Cabinet’s history. While remaining as Minister of International Cooperation, Al-Mashat succeeded Hala El-Said  (who has become the President’s Adviser for Economic Affairs) as the new Minister of Planning and Economic Development.

Al-Mashat has been part of the cabinet of ministers since 2018 as she served first as the minister of tourism (2018-2019) and then as Minister of International Cooperation since December 2019.

The current mission of the newly merged ministry includes enhancing the utilization of the tools of the portfolios of planning and international cooperation in the execution of the presidential directives. The new ministry will thus continue on the path of economic reform and developing high-priority sectors, the most important being education, health, and industrial localization.

Under Egypt’s $8 billion loan deal with the IMF, Egypt targets a real GDP growth of over 4 percent in the current FY2024/2025 and a primary surplus of 3.5 percent. Therefore, Egypt will focus on leveraging more foreign investments and development financings.

Recently, Al-Mashat announced that Egypt has managed over the past few months to leverage $2 billion to support the country’s economy and budget. Furthermore, she noted that Egypt has managed to leverage over $57 billion in new commitments from international financial institutions and development partners, including the IMF, World Bank Group, and African Development Bank.

 

Investment and External Trade in the same portfolio
 

Increasing foreign direct investment (FDI), bettering the investment environment, and maintaining and encouraging competitiveness in investment are the main priorities for the new Ministry of Investment and Foreign Trade, according to Hassan ElKhatib, the new Minister of Investment and Foreign Trade.

“I believe that the new ministerial group must cooperate to improve the investment environment in Egypt, and we have many challenges that we must face,” ElKhatib noted.

He took the oath as Minister of Investment and Foreign Trade, replacing Ahmed Samir. This is the first time the investment file goes hand in hand with foreign trade.

Previously, the external trade file was coupled with the more general trade ministry. Moreover, the cabinet restored investment as a ministerial portfolio after dissolving it in the cabinet reshuffle in December 2019.

ElKhatib said the ministry would adopt a “one-stop” service for investors, thus providing them with all the services they need in a single place and connecting them to relevant ministries. He also said the ministry intends to make procedures and permits easier to complete.

“We need to operate as a one-stop shop for the investment environment in Egypt and improve the foreign and local investment environment. The role of the Minister of Investment is to help every small and medium-sized enterprise in Egypt because it employs, creates job opportunities, and exports within the framework of a clear vision for investment,” ElKhatib stated.

Egypt is exerting immense efforts to attract foreign investors to boost employment rates and obtain foreign currency. It has secured direct foreign investments (FDIs) worth $10.04 billion during the FY2023/2024, which concluded on 30 June.

According to Hossam Heiba, CEO of the General Authority for Investment and Free Zones (GAFI), Egypt has achieved a growth rate of 12.3 percent in the current Fiscal Year, compared to FY2022/2023.

In addition, Egypt signed its biggest-ever FDI deal (worth $35 billion) with the UAE in February to develop the coastal zone of Ras El-Hekma. Similarly, the Egyptian government signed an agreement with giant real estate developer Talaat Mostafa Group (TMG) on Wednesday to establish SouthMED, a new $21 billion (EGP 1 trillion) project on the North Coast.

These inflows come after a long period of economic challenges within the Egyptian economy due to the Russian-Ukrainian war, which forced the country to face rising wheat and energy prices. In addition, the war on Gaza, which caused a decline in tourism and Suez Canal revenues, harmed the country's economy.

As for external trade, ElKhatib pointed out that the new ministry will work on increasing exports, solving problems faced by exporters, and attracting international and regional companies to locate their factories in Egypt, all of which would create various sources of foreign currency and jobs.

“It may be that exports in the recent period have been low, but I expect these numbers to double if we improve the environment and start solving the problems of exporters and the problems facing exports,” he explained.

According to CAPMAS, Egypt’s imports rose to EGP 2.3 million in May, compared to EGP 1.7 million in January 2024. Exports also increased to EGP 1.4 million, up from EGP 1.1 million recorded in January 2024. These figures reflect that Egypt’s trade deficit has grown over the last three months.