The African Development Bank (AfDB)’s new country strategy for Egypt is expected to be approved and come into effect by early June, said AfDB Officer-in-Charge and Deputy Director-General for the North Africa Region Abdourahmane Diaw.
In an interview with Al-Ahram Weekly, Diaw explained that the four-year strategy is built on the two key pillars of strengthening Egypt’s competitiveness and supporting robust private sector-led growth and job creation and building resilience to achieve food and water security and energy efficiency.
Diaw hailed the plan announced by the government in May that involves widening the private-sector share in the Egyptian economy to 65 per cent and up from the current 30 per cent over the coming three years.
“We support such an objective, especially since Egypt has a clear vision of its economic activity as well as implementing an economic reform programme, all of which is highly commendable,” he said.
The AfDB plans to showcase Egypt’s model, showing the successes of its economic reform programme. “This could be a footprint to be followed on the African continent. Egypt was among the few countries globally to attain positive real GDP growth in 2020 despite the severe impacts of the Covid-19 pandemic,” he added.
On the AfDB country strategy, Diaw told the Weekly that its first pillar focuses on giving greater space to the private sector as it has a leading role in job creation.
He said that President Abdel-Fattah Al-Sisi had announced an ambitious plan for tapping state-owned assets and pushing forward the government’s initial public offerings (IPO) programme, both of which emphasise the role of the private sector.
“Our role is to support the government of Egypt in creating a suitable environment for private-sector growth,” Diaw said.
He said the bank’s strategy also targets the country’s transport sector through railway modernisation projects that will contribute to easing the transport of food products. It aims to enhance workers’ skills in order to support the country’s value chains.
On the second pillar of the strategy, Diaw explained that this centers on building Egypt’s resilience in order to achieve food and water security and energy efficiency.
“The government has a clear strategy regarding how to go ahead with economic activity. Egypt has implemented a first wave of reforms to improve fiscal consolidation and macroeconomic performance. The AfDB eyes supporting Egypt’s second wave of reforms, particularly in the social-protection sector with a special focus on the Decent Life Initiative — which is the kind of initiative we are willing to support,” he said.
The strategy aims to continue AfDB current projects in waste-water management and to increase investments in the agricultural sector based on positive experiences in this field.
The Covid-19 pandemic and the Russian-Ukrainian conflict have caused a global food crisis that is harshly affecting the food situation in Africa.
“Egypt, being one of the world’s largest wheat importers, especially from both Russia and Ukraine, needs to diversify the sources it relies on to secure this strategic food commodity, and we can develop some kind of partnership in this regard,” Diaw said, indicating that the bank could help to increase the accessibility of arable land in particular.
The AfDB can also help to support the government in its efforts to contain the impacts of the crisis and its financial repercussions, Diaw said.
On energy, Diaw said the AfDB supported natural gas production and solar energy. “In general, the African continent has an abundance of natural gas reserves. We need a balanced plan, as natural gas must be included in the development plans of the continent’s countries, including Egypt. The European countries are exploring alternative markets that they can count on to secure their natural gas needs. Africa could be one of their sources,” he said.
He said the AfDB would be pushing this agenda at the upcoming COP27 meeting in Sharm El-Sheikh in November, adding that “we are very pleased that Egypt will host such a critical conference as the voice of Africa.”
Diaw said that the COP27 meeting would host the African Pavilion financed by the AfDB, adding that the bank is currently collaborating with the government in preparing documents and technical papers for it.
“Once the bank’s country strategy is approved, we will hold a launch mission and announce the potential programmes that we can execute under it,” Diaw said.
He revealed that the bank, in collaboration with its partners, is expected to announce an operation targeting Egypt by the end of 2022 by developing a programme exploring avenues through which the government can address the crisis in partnership with the World Bank and the International Monetary Fund (IMF).
Touching upon Egypt’s investment opportunities, Diaw explained that the bank eyes tapping such opportunities as being in line with the government’s priorities agenda, adding that the AfDB was willing to establish a partnership with the Sovereign Fund of Egypt to seize the opportunities this provides.
Diaw said that the AfDB’s current project portfolio in Egypt amounts to $1.2 billion over 24 operations, adding that the bank invested $2.2 billion in its last country strategy of 2017-2021.
“In 2022, we intend to invest $400 million in the Egyptian market. The amount invested each year has yet to be confirmed by the bank,” he concluded.
*A version of this article appears in print in the 2 June, 2022 edition of Al-Ahram Weekly.