Ready for the Take-off

Naglaa Arafa
Friday 23 Dec 2022

On 17 December 2022, The IMF Executive Board has finally approved the US$ 3 billion Extended Fund Facility (EFF) to Egypt over a period of 46 months and where the amount of US$ 347,000 million will be released immediately.


The Press Release issued by the IMF in this connection calls for a permanent shift to a flexible exchange rate; fiscal consolidation; expansion of social spending; structural reforms to reduce the state footprint; strengthen private-sector-led growth, and enhance governance and transparency.

In my opinion, to ensure the readiness for the smooth take off, the above provisions are the basics to effect the required sustainable change in the economy. Enhancing productivity, production, exports, investment, and employment are key to ensure the sustainability of economic growth and its resilience against future shocks. As regards to the expansion of social spending, several Presidential Initiatives such as The Decent Life Initiative, Egyptian Women's Health Initiative, The Family Development Initiative, and others are all being implemented and are already showing results.

The Government is also already moving forward with several actions and initiatives along the lines referred to in the press release prominent among which is the State Ownership Policy Document and the National Dialogue. To complement and consolidate efforts to realize the desired results and change in the economy, I would recommend giving due consideration to

- Expediting the follow-up on and implementation of the range of recommendations of the Economic Conference held in October 2022 which brought together all stakeholders, the movers and shakers, business and government to discuss the issues concerning the investment environment in Egypt. It is encouraging that the tEgyptian Cabinet has just launched the “Gold License” Website to receive investors' requests to get this license online.

- Establishing an Economic Advisory Board comprising senior economists and researchers to support the analysis and interpretation of economic developments at the national and international level; to advise on and provide options for the formulation of national economic policy and the efficient allocation of resources; and to prepare periodic economic outlook reports

- Urgently addressing issues, challenges and reforms related to the sectors of agriculture, industry, tourism, formal and technical education, vocational training and higher education which collectively comprise the backbone to enhance productivity, production and exports in the Egyptian economy. A broad consultative process would be necessary to solicit the inputs and perspectives of the concerned stakeholders for each of these sectors to come up with concrete and actionable recommendations

- Upscaling the monitoring and evaluation of policies and programmes to continuously reveal issues and to generate knowledge and lessons learned for decision makers and to also ensure that national goals concerning women empowerment, preservation of the environment and the promotion of the culture of human rights are being adequately addressed. Towards this end, a key progressive programme was launched in March 2022 by the Ministry of Planning and Economic Development, namely, the Egypt Impact Lab which seeks to strengthen evidence-informed policy and to build government capacity in the use of evidence.

- Strengthening efficiency and effectiveness of development efforts through broadening the dialogue and consultation with stakeholders and target beneficiaries to sharpen the focus of policies and programmes and to ensure that they are responsive to the needs of the recipients. A good case in point for this approach is the Economic Conference as mentioned above

- Promoting innovation as a key driver to economic growth. Innovation is not only about technology, digitization, and automation, it is also about new ways, new ideas and processes to do things, it is about new products and working smarter to create new value. The OECD study on “Innovation and Economic Growth” makes the case for how technological innovation is considered a major force in economic growth with examples of innovation in the highly industrialized economies.

- Despite the concerted national efforts over the past decades, Egypt’s population reached almost 105 million and is on the rise. As per Egypt’s National Strategy for Human Rights, the steady population increase continues to present a major obstacle to ensure that all Egyptians have access to an adequate living standard and to reduce poverty. Since initiatives in this area cannot be business as usual, the Government has launched the National Family Development Plan introducing new ways and means to address this huge challenge. The Plan adopts a comprehensive and innovative approach to upgrade the population characteristics and to stabilize population growth through awareness and education; service provision, economic empowerment as well as a financial incentives program.

*The writer is former Assistant Resident Representative in UNDP Egypt

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