Minister of Planning and Economic Development Hala Al-Said told the House of Representatives on Monday that Egypt was one of the few countries to achieve economic growth during the coronavirus pandemic, recording a rate of 3.6 per cent in the second half of 2019-20.
She added that “the economic growth rate in the first half of 2019-20 came in at 5.6 per cent, meaning the pandemic only slowed the growth rate by two per cent in the second half of 2019-20.
“This is one of the fruits we reaped from the economic reform programme adopted in November 2016. Because of the programme the economy was capable of containing the crisis.”
Al-Said said the government had been targeting a growth rate of 5.8 per cent in 2019-20 and six per cent in 2020-21, expectations that the pandemic had tempered.
Reviewing the implementation of the government’s Egypt Kicks Off programme, the minister hailed economic reforms between 2016 and 2019 as being responsible for the fall in the unemployment rate to 7.3 per cent in the first quarter of 2020-21 from 9.6 per cent in the fourth quarter of 2019-20.
“Inflation also dropped from 33 per cent in 2017-18 to 13.9 per cent in 2018-19 and then to 5.7 per cent in 2019-20, the lowest in 14 years,” she said.
The government was also able to cut the poverty rate from 32.5 per cent in 2017-18 to 29.7 per cent in 2019-20 “because of the flow of investments into governorates in a balanced way accompanied by the implementation of a package of social protection programmes.”
Al-Said drew attention to the LE500 billion Decent Life initiative that the government is implementing over the next three years and from which she said “50 million citizens in underdeveloped villages nationwide will benefit.”
Referring to a second initiative announced by President Abdel-Fattah Al-Sisi in early 2019 to improve living conditions in poor rural villages across Egypt, Al-Said added that “allocations for the first phase are estimated at LE20 billion and will cover an additional 4.5 million people in 375 villages.”
The second phase of the initiative, launched in December 2020, targets 18 million inhabitants of 1,500 villages.
One strand of the government’s anti-poverty strategy is to direct public investment to improving basic infrastructure. “This includes transport, drinking water and drainage and electricity services which have a direct impact on the quality of life of citizens,” said Al-Said. “Public investment in these sectors will have reached LE500 billion this year.”
“A total of 416 electricity projects have been implemented at a cost of LE95.6 billion, 689 housing projects at a cost of LE72.6 billion, 145 transport projects at a cost of LE33.2 billion, 37 petroleum projects costing LE431 billion, 458 irrigation projects at a cost of LE5.6 billion, and 20 agricultural projects with a cost of LE4.3 billion,” said Al-Said.
The above projects, Al-Said noted, meant that Egypt rose to rank 52 on the international infrastructure quality index in 2019 compared to 100 in 2014.
Investment is also being directed to the health and education sectors, with increased allocations allowing for the “building of 120 hospitals and health units, 26,000 classrooms and nine new technology universities”.
The overall aim, Al-Said continued, is to transform Egypt into a productive, knowledge-based economy that can compete globally.
Several MPs complained the picture of the economy Al-Said described bore little relationship to reality on the ground.
“When I heard the figures on the poverty rate I thought she was speaking about a different country,” said MP Farid Al-Biadi. He pointed out that “the Institute of National Planning announced in a study in May 2020 that 44 per cent of the population of Egypt livse under the poverty line, and that the country ranks 117 on the International Corruption Index.”
Mustafa Salem, deputy chairman of parliament’s Budget Committee, expressed concern that the government was resorting to foreign borrowing to finance its plans. “There has been a doubling of public debt, LE1.1 trillion of which is accounted for by foreign borrowing,” claimed Salem.
Salem said the fact the Ministry of International Cooperation had signed 150 loan protocols “illustrates excessive dependence on loans which will only exacerbate the crisis”.
In response, Al-Said said that since taking her present post in December 2019 she has also headed the Foreign Borrowing Committee which reviews loan requests and “has so far rejected 45 per cent of the 85 loan applications that have come before it following thorough scrutiny and checks”.
Al-Said stressed that the policy of the Ministry of Planning is firmly based on diversifying project financing.
“We have widened the financing of development plans and programmes to include the private sector, civil society organisations and sovereign funds,” said Al-Said.
“Egypt’s Sovereign Fund is playing a greater role in financing the government’s planned investments, including mega projects such as overhauling the railways, and smaller schemes such as repurposing the Mugamaa building in Cairo’s Tahrir Square into an attractive tourist centre.”
*A version of this article appears in print in the 11 February , 2021 edition of Al-Ahram Weekly