For Egypt, the past eight years have not been a passing phase of turbulence, but a succession of severe geopolitical shocks that have compelled the state to rethink its economic instruments, redefine the boundaries of its role, and revisit the very philosophy of development.
The question is no longer simply how a state achieves growth, but how it does so without forfeiting social and political balance amid supply-chain disruptions, energy volatility, regional tensions, and mounting pressure on sovereign resources.
It is within this context that the following interview with Dr. Ahmed Rostom, Minister of Planning and Economic Development, conducted in Washington on the sidelines of international financial meetings, sheds light on a deeper shift within the Egyptian state: a gradual transition from reacting to crises to managing, anticipating, and transforming them into opportunities capable of reshaping the economy.
Ahram Online: In light of President Abdel-Fattah El-Sisi’s directives to reorder spending priorities in favour of the citizen, how is the Ministry redefining the philosophy of development? Are we moving from conventional growth toward a model more closely tied to social justice and political stability?
Dr. Ahmed Rostom: The Economic and Social Development Plan for fiscal year 2026/2027 directly reflects the President’s directives to reorganize public spending in a way that improves citizens’ quality of life while advancing economic development, boosting productivity, and investing in human capital.
Egypt’s development philosophy is undergoing a clear transformation, moving beyond a narrow focus on growth toward a more inclusive model that delivers tangible social impact. The plan prioritizes improving living standards through expanded essential services and stronger social protection.
At its core is the presidential “Decent Life” initiative, with the completion of its first phase and the launch of the second, underscoring the state’s commitment to equitable development and reducing regional disparities.
Total investments are estimated at EGP 3.7 trillion, allocated to maximize developmental returns. Health sector allocations have increased by 25 percent, with a focus on comprehensive health insurance. Pre-university education funding has risen by 11.5 percent, alongside plans to expand 100 Egyptian–Japanese schools and rehabilitate 1,000 technical schools in partnership with the private sector.
Social protection allocations have increased by 57 percent, while investments in utilities, water, and sanitation have grown by 22 percent, social housing by 21 percent, irrigation by 88 percent, and renewable energy by 261 percent.
Redefining development also means redefining the state’s role. The private sector now accounts for around 59 percent of total investments, with a target of 64 percent by 2030, enhancing efficiency without compromising the state’s social responsibilities.
Ultimately, success will not be measured by growth rates alone, but by citizens’ satisfaction and the opportunities created for future generations.
AO: Egypt has faced an unprecedented series of geopolitical shocks. To what extent have these crises reshaped the state’s planning doctrine?
AR: These challenges have fundamentally reshaped our planning methodology. Planning is no longer based solely on traditional indicators but now relies on multiple scenarios that account for global uncertainty, alongside continuous monitoring of international developments.
This has led to more conservative growth estimates, but also to a shift in perspective. Crises are no longer viewed solely as disruptions, but as opportunities—for local manufacturing, import substitution, agricultural exports, and tourism.
Five key sectors are expected to contribute around 64 percent of growth in fiscal year 2026/2027, led by manufacturing, strengthening job creation, and competitiveness.
The economy grew by 5.3 percent in the first half of the current fiscal year, with projections of 5.4 percent next year and 6.8 percent over the medium term, while maintaining cautious scenarios if tensions persist.
Investment is projected at 17 percent of GDP, rising to 20 percent over the medium term, supported by total investments of EGP 3.7 trillion and a stronger private-sector role.
AO: As a former World Bank expert and now Minister, what is your agenda at the IMF and World Bank Spring Meetings?
AR: Our relationship with the World Bank Group and the IMF is strategic and adaptable. Reviews are not rigid evaluations but mechanisms to assess realities and adjust accordingly.
Flexibility means identifying alternative pathways to achieve reform goals in light of geopolitical shocks affecting supply chains, energy markets, and Suez Canal navigation.
Over the past seven to eight years, Egypt has faced five major shocks, yet the reform program has consistently demonstrated resilience.
Growth may slow during crises but rebounds quickly. Recent precautionary measures—initially criticized—proved timely and effective. Growth reached 5.3 percent in the first half of fiscal year 2025/2026, with third-quarter projections ranging between 4.5 and 5 percent, depending on the duration of the conflict.
AO: As Egypt’s Governor at the Islamic Development Bank, what are your priorities?
AR: The Islamic Development Bank is a key partner. Our focus is on securing concessional financing with long maturities of 25 to 30 years, including grace periods and competitive rates.
We have strengthened governance within the debt committee to ensure that all borrowing is directed toward projects generating real developmental returns.
We are also expanding cooperation with the bank’s private-sector arms, in line with our broader strategy to increase private-sector participation.
AO: What steps has the state taken to strengthen the private sector’s role?
AR: A binding ceiling on public investment has been maintained for three consecutive years to create space for the private sector.
Private investment is targeted at 59 percent of total investment, rising to 64 percent by 2029/2030.
We have also introduced stricter governance over public spending, ensuring that every pound spent either improves services, reduces burdens, or creates opportunities for citizens.
New initiatives include expanding private-sector participation in infrastructure, supported by cooperation with the World Bank, particularly through innovative financing tools that reduce risk and provide long-term local-currency funding.
AO: You met with World Bank Group President Ajay Banga. What were the key takeaways?
AR: The meeting reaffirmed the depth of our long-standing strategic partnership with the World Bank.
We reviewed the President’s recent visit to Egypt and discussed positive economic indicators despite regional tensions. International reports have highlighted Egypt’s proactive response to crises.
We also discussed financing frameworks aligned with the bank’s shift toward low-risk, long-term development financing.
AO: What are the main features of the new measures governing planning and spending?
AR: We identified ten key challenges in monitoring implementation and designed fourteen measures to address them.
Ten measures will be implemented in fiscal year 2026/2027, while others extend into the medium term under the Unified Planning Law.
A key reform is the introduction of an appropriations framework to regulate disbursements, limiting advances after the second quarter and tightening expenditure control.
We are prioritizing near-completion projects over new ones and introducing project-level monitoring, alongside risk matrices for ongoing projects.
These reforms also include a development formula to ensure balanced growth across governorates and better alignment of national priorities.
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