Navigating Egypt's economic roadmap: challenges loom amidst visionary goals

Muhammed Khalid , Thursday 18 Jan 2024

To fortify its economy over the next presidential term, Egypt has rolled out an extensive eight-directional economic strategy spanning 2024-2030.

Egypt s pyramids.
Egypt s pyramids.


The comprehensive blueprint, set for public discussion before official approval, targets various facets of the economy and the quality of life.

As the nation strives for economic resilience, two economic experts shed light on potential opportunities and challenges in this groundbreaking plan.

"The government has drafted the strategic plan to position its economy as robust and resilient over the next presidential term through 2030," stated economic and banking expert Mohamed Roshdy.

Roshdy outlined key objectives, including restructuring the GDP, aiming for $145 billion in annual exports, and doubling foreign direct investment's contribution to GDP to around $100 billion between 2024 and 2030.

He anticipated the services sector, especially technology, to surpass agriculture and industry, becoming the top value-added segment. 

Egypt’s real GDP growth rate slowed to 2.65 percent in the first quarter of the fiscal year 2023/2024, from 4.4 percent in the same quarter of FY2022/2023 (July-September), as per data released by the Ministry of Planning and Economic Development.

"The successful implementation of this ambitious roadmap could return the nation to regional economic leadership. The plan aligns with the national strategies to strengthen the country's development trajectory,” Roshdy added.

He also highlighted that the private sector aims to invest EGP 600 billion in 2023-2024, constituting approximately 36 percent of the targeted investments.

Egypt has recently taken significant steps to encourage investment and entrepreneurship, guaranteeing equal treatment between public and private sectors, supporting the investment climate, and enacting legislation for startups.

In December, President Abdel-Fattah El-Sisi approved the State Ownership Policy Document, which determines the state's presence in the economic sectors and seeks to enhance the private sector's participation in public investments.

Roshdy also noted that the plan involves expanding agricultural land, ensuring food security, and elevating the contribution of manufacturing industries to 20 percent of GDP by 2030.

In addition, he noted that the government aims to concentrate on telecommunications, information technology, and artificial intelligence in line with global strategies for digitalization.

"In summary, the economic development plan for 2023-2024 envisions collaborative efforts between the private and public sectors. The focus on balanced growth across agriculture, industry, and services aims to stimulate private investments, foster entrepreneurship, and implement targeted strategies for each sector to achieve sustainable economic growth,” Roshdy concluded.

On the other hand, economic expert Rashad Abdo voiced concerns about the plan.

According to Abdo, the goals outlined are unrealistic, and investors are discouraged from launching projects in Egypt due to varying exchange rates and the USD shortage.

He further pointed out potential hurdles facing the plan, such as the impact of the Red Sea crisis on the revenues of the Suez Canal and the lack of trust among Egyptian expats, who redirect remittances to investments in USD and gold.

Abdo called for a new specialized economic cadre and emphasized the need to increase Egypt's economic output to boost exports and reduce imports while avoiding the exhaustion of the country's USD resources.

Egypt has been facing harsh economic conditions since February 2022 due to the global and domestic ramifications of the war in Ukraine and the global supply chain crisis.

The crisis caused investors to withdraw approximately $20 billion in hot money from the Egyptian market; it forced the Central Bank of Egypt (CBE) to devalue the pound by 50 percent (according to official rates ).

Cairo is seeking additional funding to close a $17 billion financing gap by 2026. The Egyptian government projects the gap for FY2023/2024 to be between $6 and $8 million.

Therefore, the country is negotiating a new timeline for its $3 billion loan program with the International Monetary Fund (IMF). The program has faced several challenges that hindered the first and second reviews of the program originally scheduled for March and September 2023.

The latest figures indicate that Egypt’s total external debt reached $164.52 billion at the end of September 2023.

According to CBE's latest data, the country is expected to pay approximately $32.79 billion in debt service in 2024.

Short link: