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Wednesday, 28 July 2021

Egypt: International partnerships on SMEs

International donor agencies are helping small and medium-sized enterprises in Egypt to alleviate poverty and reduce unemployment

Ahmed Abdel-Hafez, Saturday 24 Apr 2021
International partnerships on SMEs
International partnerships on SMEs
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The government has laid out a strategy to improve people’s quality of life in cities and the countryside based on introducing unorthodox mechanisms to support small and medium-sized enterprises (SMEs), Medhat Massoud, head of the Central Sector for Community and Human Development at the Egyptian Micro, Small, and Medium-Sized Enterprises Development Agency (MSMEDA), has told Al-Ahram Weekly.

“State projects to make infrastructure such as drinking water, sewerage networks, and paved roads available in impoverished areas are meant to provide young people with the opportunity to set up or expand small enterprises,” Massoud said.

The infrastructure projects can generate thousands of job opportunities for casual workers, being often carried out using labour-intensive methods that rely on unskilled and semi-skilled workers instead of machines and equipment.

Between 2014 and 2020, the Ministry of International Cooperation and international donor agencies also coordinated to deliver funds to support SMEs. The World Bank and European Union provided $200 million and 70 million euros, respectively, to finance projects in 20 governorates identified according to Egypt’s poverty map and focusing on Upper Egypt.

The French Development Agency focused on shanty towns in Cairo and Giza, providing funds worth 15 million euros, while the European Investment Bank opted for various locations, giving 15 million euros to support existing projects in Assiut, Giza, Port Said, Menoufiya, Alexandria, and Sharqiya.

Some of the funds Egypt received from international donor agencies to support SMEs were targeted at helping Syrian refugees. The UN Development Programme (UNDP) and the Kuwaiti government jointly gave $500,000 to be disbursed in the governorates of Menoufiya, Alexandria, and Sharqiya with a view to meeting the needs of communities hosting Syrian refugees.

The sum was also meant to alleviate poverty and reduce unemployment rates by providing temporary jobs to unskilled and semi-skilled workers and services in healthcare, the environment, and infrastructure.

In addition, the UNDP and Japan provided $1 million to the governorates of Qalioubiya, Alexandria, and Giza to decrease poverty and unemployment rates and increase the efficiency of social services in poorer communities hosting Syrian refugees.

The goals of the Egyptian government and the European Union are very similar regarding illegal migration, Massoud said. Over the past six years, Egypt has been coordinating with international donor agencies to focus on societies exporting illegal migrants by providing them with job opportunities in their countries of origin.

The agencies include the International Migration Organisation, which jointly with the Italian Agency for Development Cooperation funded a 176,000 euro grant to Sohag governorate.

The MSMEDA has also signed a 27 million euro grant agreement with the European Union to fight illegal migration. The fund was allocated to 11 governorates based on Egypt’s poverty map to work on three projects.

The first employs thousands of unskilled young people on projects to upgrade infrastructure, such as replacing or renewing drinking water networks and extending maintenance on public-service buildings, while at the same time providing the young people concerned with training in related skills and services.

The second rehabilitates young people in rural areas on healthcare awareness and the environment and helps to reduce illiteracy levels. The third trains young people in industrial skills and handicrafts to qualify them to be self-employed or to set up SMEs, increasing their skills to fulfil the needs of the labour market.

International donor agencies have contributed to funding 649 agreements worth a total of LE2.3 billion over the past six years, Massoud said.

The funds were largely allocated to implementing heavy labour projects in the fields of infrastructure, social development, and training, and resulted in achieving 30.1 million paid days for casual workers.

Sixty-six project deals were signed with funds totaling LE145.8 million and representing 58,000 paid labour days for casual workers.

The MSMEDA provided LE1.7 billion through 140 deals focusing on infrastructure to improve drinking water, sanitary, and road networks, and irrigation projects. Combined, these projects created 7.2 million paid labour days.

Egypt also spent LE675 million and funded 23 million paid labour days to improve the social-development sector concerned with healthcare, education, and environmental projects.

*A version of this article appears in print in the 22 April, 2021 edition of Al-Ahram Weekly

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