Growth and development critical for Egypt to deal with rising debt: IMF's Mohieldin

Ahram Online , Thursday 21 Apr 2022

Developing countries, including Egypt, should prioritise development and growth in collaboration with the private sector to deal with elevating debt levels amid the ongoing economic challenges, said Mahmoud Mohieldin, an executive director at the International Monetary Fund (IMF).

Mahmoud Mohieldin
Egypt s economist Mahmoud Mohieldin, executive director at the International Monetary Fund (IMF). File photo

Mohieldin, who is also the United Nations Special Envoy on Financing the 2030 Development Agenda, made his comments during a meeting with the editorial board of Al-Siyassa Al-Dawliya magazine and a number of Al-Ahram journalists.

Mohieldin noted that the country’s IMF-backed economic reform programme, which lasted from November 2016 through July 2019, had notable results in terms of curbing various economic imbalances.

Moreover, the budget managed to attain a positive initial surplus, which indicates that the country’s external and local debt are in the safe zone.

“Egypt needs both investment and growth to attain the required economic progress,” Mohieldin explained.

In this respect, Mohieldin asserted that Egypt has to increase public investments – which currently stand at 7 percent – by between 10 percent and 20 percent as well as raising private investment to 20 percent, up from the current share of 5.5 percent.

This would help the country deal with rising inflation as well, Mohieldin said.

Mohieldin also stressed that the country should build on the economic reforms of the past five years by raising private investments that have an added value and provide more job opportunities, in addition to attracting local private investments and increasing domestic saving, both of which will be achieved by raising incomes.

“Egypt should bolster the micro, small, and medium-sized enterprises sector, which is the key driver of economic growth in many countries across the world, and increase the number of these entities in light of the market needs,” Mohieldin added.

Moreover, the country should increase human capital, education and healthcare and green investments, he said.

Regarding the anticipated Conference of Partners (COP27) that Egypt will host in November, Mohieldin said that it is an opportunity to discuss increasing investments in renewables, green hydrogen, addressing agriculture and water problems, and providing more supply chains.

Mohieldin also said that Egypt’s Decent Life initiative is one of the most important actions the country has taken to improve standards of living.

This initiative also supports the Egyptian economy with its contribution to the production of local factories and providing job opportunities through projects implemented under its umbrella.

On Egypt’s New Administrative Capital, Mohieldin said that building the new capital was a positive move as it directly contributes to jump-starting the economy and providing job opportunities amid the global economic recession.

“Egypt is on track under its Egypt Vision 2030, which is completely in line with the UN’s global sustainable development goals,” he added.

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