Egypt’s Narrative for Economic Development, launched last week and now available for public consultation and discussion, covers the coming five years and adopts a “new economic model” that centres on encouraging the high-productive sectors of the economy to boost macroeconomic stability and create the fiscal space for boosting human development.
These sectors include tourism, information and communication technology (ICT), agriculture, energy and manufacturing, the Narrative says.
The key targets of the Narrative include doubling the contribution of foreign direct investment (FDI) to GDP to 4.4 per cent, creating 1.5 million jobs, bringing down the debt-to-GDP ratio to 70 per cent, achieving $145 billion in exports, increasing the share of manufacturing in GDP to 20 per cent, and attaining seven per cent real GDP growth.
The targets also include achieving a four per cent primary surplus during the current fiscal year 2025-26 and raising the private sector contribution to GDP to around 80 per cent.
The Narrative charts a sustainable growth path to 2030, offering a comprehensive framework that builds on the Egypt Vision 2030 development strategy while adapting to global and domestic shifts, Hani Genena, head of research at investment bank Al Ahly Pharos, commented to Al-Ahram Weekly.
Genena said that the coming five years will be critical for Egypt as it capitalises on its upgraded infrastructure and channels both local and foreign investments into sectors with clear comparative advantages.
These include agri-processing, textiles, agriculture, logistics, ports, tourism, information technology outsourcing, and the Suez Canal, all of which can generate sustainable hard currency inflows, he noted.
Genena believes that targeting FDI to reach four per cent of GDP, compared to the current average of around $10 billion annually which equals about two per cent, “would be sufficient to cover any current account deficit” and would allow Egypt “to use surplus flows to reduce external debt”.
Genena is hopeful that Prime Minister Mustafa Madbouli’s announcement that Egypt aims to bring down its debt-to-GDP ratio to its lowest historical levels by the end of the decade, shifting from borrowing towards a model of fiscal sustainability, will be attainable.
He argued that the strategy is achievable given the March 2024 exchange-rate liberalisation, the trade diversion to Egypt following US tariffs introduced by the Trump administration, high inflation in Turkey boosting Egypt’s competitiveness, and ongoing reforms under the International Monetary Fund (IMF) programme.
“These four factors combined create a unique window for Egypt to achieve the Narrative’s targets of sustainable growth, debt reduction, and job creation,” Genena said.
During the launch event for the Narrative last week, Madbouli stated that it draws a path for the national economy after the completion of the ongoing loan programmes.
This month Cairo will receive a delegation from the IMF to carry out the combined fifth and sixth reviews of the current $8 billion loan deal. The discussions will also include the completion of the first review of the Resilience and Sustainability Facility (RSF) $1.3 billion loan programme.
According to banking expert Hani Abul-Fotouh, the current IMF programme remains a necessary safety net to manage external obligations, but the broader Narrative envisions a future where Egypt’s economy is more self-reliant and job creation less tied to external borrowing cycles.
But he said that dispensing with the IMF backing after the programme ends in 2026 will not be easy, given the country’s sizeable external financing gap.
IMF reports estimate Egypt’s annual external financing needs at around $30 billion in fiscal year 2026-27. However, Abul-Fotouh noted that the influx of billions of foreign portfolio investments into Egyptian treasury bills and strategic Gulf partnerships such as the Ras Al-Hekma deal suggest alternative funding sources could reduce the reliance on IMF packages.
“Exiting IMF reliance after 2026 is possible, but only if the reforms deliver tangible results in cutting debt, attracting stable investments, and sustaining growth,” he said.
Egypt could rely on its own resources if three conditions are met: achieving six to seven per cent GDP growth, bringing inflation down to single digits, and maintaining strong foreign currency reserves, he said.
Ali Metwalli, an economic advisor at the UK-based IBIS consultancy, argued the optimal path is not a strict “yes-or-no” to IMF engagement.
“If the reforms deliver primary surpluses of two to three per cent and rising exports, Egypt could rely on a light precautionary arrangement rather than large-scale funding,” he said. But if privatisation slows or external shocks persist, the dollar gap could force a recourse to smaller IMF-supported programmes to cover financing needs at lower cost.
Combining the IMF’s fifth and sixth reviews was itself a signal, Metwally said. Progress has been mixed, and reducing the state’s footprint in the economy remains an important demand of the IMF, he added.
The government’s target of raising the private sector’s contribution to economic activity to 80 per cent is “partly achievable, provided that the state meaningfully reduces its commercial footprint,” Metwalli said.
According to the latest IMF figures, the share of private investment in the economy jumped from 38.5 per cent to around 60 per cent in the first half of the 2024-25. Metwally said that this was “a significant improvement, but still short of the broader 80 per cent target. Achieving this would require faster privatisation, strict competitive neutrality, and an orderly exit from non-strategic activities.”
Achieving the seven per cent GDP growth target will depend on a surge in private investment and positive net exports. Egypt’s exports stood at near $45 billion in 2024.
Metwalli explained that with manufacturing value-added at around 14 per cent of GDP in 2024, raising this to 17 to 18 per cent will require sector-specific incentives, export-linked local content requirements, and cheaper working capital for exporters.
Meanwhile, Metwalli argued that achieving a four per cent primary surplus as per the Narrative’s targets could be difficult, “given subsidy rigidities and high debt-service costs.”
Instead, he estimated a more sustainable outcome would be two to three per cent primary surpluses over three years, helped by lower inflation, falling interest rates, and privatisation proceeds earmarked for external debt reduction.
* A version of this article appears in print in the 18 September, 2025 edition of Al-Ahram Weekly
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