File photo: Potential going up in smoke? Egypt's cafes are a popular gathering place for long-term unemployed (Photo: Reuters)
Egypt’s unemployment rate shrank slightly in the third quarter (Q3) of 2014 by 0.2 percent to record 13.1 percent, state-run statistics body CAPMAS announced Saturday.
The reduction in unemployment, however, remains well above the 8.9 percent registered in the period ending 30 September in 2010 preceding the 2011 uprising that toppled President Hosni Mubarak.
According to CAPMAS, there are 3.6 million unemployed Egyptians nationwide. The country's labour force totals 27.6 million people.
More than 64 percent of unemployed people are aged between 15 and 29 and at least three quarters of the unemployed hold diplomas or university degrees.
The World Bank said in a report in August that the Middle East and North Africa (MENA) region needs to grow at 6.5 percent annually to provide 30 million jobs over seven years in the period between 2014 and 2020, so as to reduce high unemployment rates in the region.
Egypt's economy grew a mere 2.2 percent in the year ending 30 June. Since then a new government came to office with the promise to achieve 'inclusive growth' that would create jobs.
Recently elected President Abdel-Fattah El-Sisi, began his development plans with restructuring the state budget to cut down energy subsidies, reform the food subsidy system and raise more taxes.
As a result to these reductions in spending, the government is encouraging the private sector to raise their investments and stimulate job growth.
In September, investments minister, Ashraf Salman, said Egypt is to achieve a 3.5 percent growth in the current fiscal year ending 30 June 2015.
Salman said Egypt needs LE260-LE336 billion in investments, of which the government has only allocated LE58 billion.
When Egypt's economic growth rate was 5.1 percent in 2010, the unemployment rate was nine percent. Egypt's government hopes to achieve 6 percent growth in FY 2018/19.
Urban unemployment reached 16 percent in the three months ending 30 September while rural unemployment hit 10.9 percent.