Egypt cabinet (Photo: Al-Ahram)
Egypt's interim government plans to invest billions of dollars in infrastructure projects, including housing and transport, to revive the country's battered economy.
The government, which plans to pump some LE22 billion ($3.19 billion) into the economy as part of a stimulus package in the current fiscal year, said in a cabinet statement on Thursday that it expects unemployment to drop to 9 percent by next June through the creation of 800,000 jobs.
Egypt’s jobless rate climbed to 13.2 percent in the first quarter of 2013 according to state-run statistics body CAPMAS, though the actual unemployment rate is believed to be much higher.
The government is also targeting a GDP growth rate of 3.5 percent by the end of the fiscal year.
The Egyptian economy grew by 2.2 percent in the fourth quarter of the 2012/13 fiscal year which ended on 30 June, said Minister of Planning Ashraf El-Araby on Tuesday, with average growth for the entire 2012/13 fiscal year estimated to have reached around 2.3 percent.
Despite the stimulus spending, the government is expecting Egypt's budget deficit, which has mushroomed to 14 percent of GDP, to shrink to 9 percent in the coming nine months.
The expenditure will be funded by foreign aid, including some $14 billion pledged by oil-rich Gulf nations Saudi Arabi, the United Arab Emirates, and Kuwait since July. The figure includes a recent pledge of $2 billion made on 3 September by the UAE. Savings from the previous fiscal year will also go towards supporting the stimulus, the government said.
The investments will focus on labour-intensive infrastructure projects aimed at improving housing, utilities, public transport, and getting the country's manufacturers back on their feet after over two and half years of turmoil.
A sum of LE2.3 billion will be invested in extending natural gas to 800,000 homes.
An investment of LE2.6 billion will go towards the completion of 50,000 new housing units and another LE2.6 billion towards the reclamation of 32,000 acres of agricultural land.
Some LE1.8 billion has been allocated to complete 131 drinking water and sanitation projects, while LE1.7 billion will be invested electricity grids, lighting, pavements, and waste treatment in Egypt's governorates.
The government will also extend utilities to 36 industrial zones at a cost of LE2.6 billion and invest another LE250 million in an industrial employment training programme.
It will also allocate LE500 million to support factories whose operations have been stalled, which according to Minister of Industry and Foreign Trade Mounir Fakhry Abdel-Nour number 613.
Investments will also aim to upgrade transport infrastructure in Cairo and elsewhere, as the government pledges to implement a national programme to repair railways crossings (numbering 871) and establish 27 bridges and a new tunnel on the railway, for a cost of LE2.5 billion pounds. Another LE1 billion will be spent on completing roads and bridges.
The second phase of Cairo's third underground metro line, running from Abbasiya to Heliopolis, will be completed for a cost of LE750 million, while 600 buses will be added to the public transport network for an additional LE650 million.
Another LE80 million will be spent on achieving self-sufficiency in the production of vaccinations and LE300 million will go towards providing high-speed internet access in schools and hospitals.
Finally, LE2.2 billion will used to pay arrears owed by the government to contractors for services rendered.
The details, location, and timetable for each project will be announced at the start of the coming week, the government stated.