Egypt unemployment numbers down but more action needed, say experts

Mona El-Fiqi , Sunday 27 May 2018

Egypt’s improved economic performance has created more jobs, but experts say still more are needed

(Photo: Ahram file)

Egypt’s unemployment rate fell to 10.6 per cent in the first quarter of 2018 from 11.3 per cent in the same period in 2017, according to statistics from the Central Agency for Public Mobilisation and Statistics (CAPMAS). This figure is also an improvement over 2016 when unemployment reached 12.5 per cent.

The number of people in employment rose to around 26 million, while the number of those looking for jobs stood at around three million, representing 10.6 per cent of the total workforce. The latter is estimated at about 29 million, according to CAPMAS.

The present unemployment rate is the lowest seen over the past four years, and it is expected to reach 10.4 per cent during the third quarter of the current fiscal year. The government hopes to cut unemployment further to 8.5 per cent by 2021-2022 and four per cent by 2030.

“The drop in the unemployment rate is an important positive development since unemployment is not only an economic problem but also a political and social one,” said Ihab Al-Dessouki, head of the Economics Department at the Al-Sadat Academy for Administrative Sciences in Cairo.

However, tackling unemployment still needed a lot of efforts, he said. The number of unemployed is likely to be higher than the official figure, which does not include seasonal or temporary workers.

According to the Ministry of Manpower and Immigration, the number of temporary workers who have recently registered their data for the government’s new insurance programme has reached two million.

The insurance programme provided by the public-sector banks aims to provide a source of income in the case of the death of policy-holders to the families of seasonal labourers, farmers, and other workers who do not have regular social security coverage.

“Egypt needs one million job opportunities at least every year to address the unemployment problem,” Al-Dessouki said.

Labour-intensive industries needed to be established to create the needed jobs, he said, adding that the issue should not be just about providing employment, but also about creating productive jobs that can help to boost the economy.

He attributed the unemployment problem to the failure of the educational system to provide the market with needed skills.

Subjects taught at school and universities were too often not compatible with job requirements, he said, and there needed to be more attention paid towards providing quality technical education.

The private sector had a role to play in providing jobs, Al-Dessouki added, but it was the role of government to create a suitable business environment to attract more local as well as foreign investments.

Although it is a fundamental right for all citizens to be employed, many people continue to struggle to find a job and make a living. This has negative repercussion on society, Al-Dessouki added.

Mohamed Sherif Dawoud, a consultant to the Arab Labour Organisation, attributed the reduction in the unemployment rate to the national mega-projects that are currently underway and have helped to absorb large portions of the workforce, especially in construction.

The construction sector had helped to provide around 3.7 million jobs representing 10 per cent of workers in the domestic market, according to Planning Minister Hala Al-Said.

She said the sector was expected to achieve 12 per cent growth in the coming fiscal year, meaning that it could provide more jobs. Dawoud told Al-Ahram Weekly that faster economic growth was the best means of generating jobs.

Egypt’s GDP growth for the third quarter of the 2017-18 fiscal year rose to 5.4 per cent from 4.3 per cent in the same period last year, the best growth rate in seven years, Al-Said has said.

The higher growth rate is attributed to the economic reform programme that the government put in place in November 2016, which is tied to a $12 billion three-year Extended Fund Facility from the International Monetary Fund (IMF).

To induce growth further, the government has other projects up its sleeve. The Ministry of Planning has announced that LE26 billion will be allocated to finance investment projects in Upper Egypt and that LE3 billion will be directed to develop south and north Sinai in the budget of 2018/2019.

In parallel to the government’s mega-projects, Dawoud said that the private sector had also been working to expand already established projects and make new investments to benefit from the economic and political stability achieved over the past two years.

He was optimistic that Egypt was on the right path towards achieving UN Sustainable Development Goals such as reducing unemployment and poverty rates and improving healthcare and food security by 2030.

*A version of this article appears in print in the 24 May 2018 edition of Al-Ahram Weekly with headline: Unemployment down

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