The report provides updated data on human capital throughout the MENA region.
This report was released a week after the launch of Egypt’s New Narrative for Economic Development, which charts a map for the Egyptian economy through 2030, with a focus on creating jobs and boosting economic development.
Hereunder are the main points of the report, which are presented in contrast to the broader MENA region:
Occupations at risk
In Egypt, only about one-third of jobs are highly vulnerable to the effects of AI, similar to other MENA countries like Tunisia, Jordan, and Iran.
The report spotlights a decline in occupations involving manual/routine tasks and an increase in roles requiring non-routine analytical skills.
In response, Egypt released the second edition of its AI strategy through 2030. It aims to accelerate the development of Digital Egypt, drive social and economic progress, and position Egypt as a regional leader in AI within Africa and the Arab world.
Learning poverty
According to the report, Egypt, alongside Jordan and Tunisia, has seen a real-term decline in per-capita human development expenditure. Such a decline has occurred despite potential increases in nominal spending, as it has been offset by factors such as rapid population growth, inflation, and other economic pressures.
The report also highlights a significant lag in learning outcomes, noting that a large proportion of children in the MENA region are considered “learning poor,” meaning they cannot read and comprehend a simple text.
Egypt is identified as part of this regional pattern, with low coverage of early childhood education further compounding the issue.
To address these issues, the government's new economic plan has increased investments in human development for the current fiscal year (FY2025/2026) by 64.5 percent, compared to FY2013/2014, with a total budget of EGP 69 billion.
Additionally, subsidies and social benefits have been raised by 16.8 percent to EGP 742.6 billion, as detailed in Egypt’s new economic narrative.
Social Protection & safety nets
The report acknowledges Egypt's progress in expanding social safety nets, particularly its use of modern delivery systems such as digital IDs, social registries, and electronic payments. However, it notes that significant coverage gaps persist, with many poor segments and vulnerable groups still left out.
The report further points out that in many MENA countries, including Egypt, the poorest 20 percent of the population are often only partially covered by these programs.
Governance & digitalization
Egypt ranks relatively high among MENA countries in areas like GovTech maturity and the digital delivery of human development services.
Despite this, the report flags several weaknesses that act as constraints, including low transparency, inadequate accountability mechanisms, rigid resource allocation, and insufficient use of data for planning and monitoring.
These issues apply to Egypt, according to the WB report.
Fiscal & policy trade-offs
Egypt is mentioned among the MENA middle-income countries where human development outcomes, especially per-capita health and education spending, are under pressure because of fiscal constraints, inflation, population growth, and policy decisions that may not prioritize preventive health or early childhood development enough.
The report suggested Egypt has undertaken policies that reduce poverty via taxes and transfers, but to a lesser degree than some peers. There is room to improve the progressivity of taxes, expand benefit transfers, and improve targeting.
Megatrends Impacts
Egypt is among the countries that will be affected by demographic shifts: Rising dependency ratios, especially among the elderly, and declining fertility rates.
The report indicated that the share of people aged over 65 will increase, placing strain on pensions, healthcare, and long-term care systems.
Moreover, climate change poses a major threat, with significant impacts from coastal vulnerability, drought, and water stress.
This is a particularly serious concern given that a large portion of the population lives in vulnerable coastal areas.
Opportunities for Reform
As per the report, Egypt is identified as having already adopted some delivery innovations, including digital payments, registries, and the use of technology in human development service delivery.
The report proposed that Egypt could benefit from reforms such as withdrawing untargeted energy subsidies, reorienting health spending toward preventive services, expanding early childhood care, adjusting pensions, improving revenue mobilization through tax reforms, and using digital tools.
Egypt is currently engaged in an $8 billion Extended Fund Facility (EFF) loan programme with the International Monetary Fund that focuses on developing the monetary and fiscal policies in the country.
The fifth and sixth reviews are expected to be completed in December.
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