The Economic Conference...Egypt 2022
Thursday، 20 October 2022 - 10:12 PM
President Abdel Fattah El-Sisi attended on Sunday 23-10-2022 the opening session of the Economic Conference…Egypt 2022, which is organized by the government in the New Administrative Capital (NAC) for three days.
Prime Minister Moustafa Madbouli along with a number of statesmen, economists, thinkers, businessmen and experts attended the opening session.
The Economic Conference… Egypt 2022 began by screening a documentary on the Egyptian economy and the big challenges it passed through over the past period.
The film shed light on Egypt's wise leadership that enabled it to fight terrorism, restore security, build State institutions, set up the new Suez Canal, adopt a comprehensive reform plan, develop a transport mechanism and launch a national road project at a cost of 310 billion dollars.
The film showed the big achievements that were realized as regards developing power mechanism by 1.5 trillion pounds, setting up 17 industrial complexes and four integrated industrial cities, developing ports by 129 million pounds and setting up 30 new cities.
The film shed light on the radical restructure of economy after the liberalization of exchange price, fighting the black market to lure foreign investments and boosting the national industry.
In line with the economic reform plan, the film showed a number of social initiatives that were launched for the needy people, citing the launch of Decent Life initiative to improve the life of more than 60 million citizens, the "100 Healthy Lives" campaign and the launch of the first stage of the comprehensive Health Insurance System in six governorates at a cost of 23 billion pounds.
The documentary film also highlighted the decrease the budget deficit from 12.3% in 2016 to 8.2% in 2019 and inflation from 14.5% to 9.2% as well as the increase of cash reserves to 45.5 billion dollars and Gross Domestic Product to 6.6% in 2022.
It showed how the economic reform plan has increased the resilience of national economy to be able to face many changes starting from the 2015 Russian plane explosion, the coronavirus pandemic and the Russian-Ukrainian conflict.
Despite these challenges, Egypt was able to secure strategic commodities, localize the industry and encourage young entrepreneurs.
Prime Minister Moustafa Madbouli delivered a speech at the opening session of the Economic Conference…Egypt 2022.
He said the conference comes at a time of an international crisis that was not witnessed since the WWII, stressing that the Economic Conference 2022 represents the political leadership's understanding of the importance of laying down an economic roadmap with the participation of all parties concerned, including experts, businessmen and political parties.
Madbouli said all developed and emerging economies are struggling to survive and ensure stability, adding that Egypt is not isolated from the world.
He aslo said the economic roadmap will tackle means of recovery from the short-term international crisis with solutions for some chronic problems.
He pointed out that some economic opinions in the local and international media are not based on good knowledge of the real economic situation, highlighting the importance of building future solutions on correct information.
Prime Minister Moustafa Madbouli highlighted the importance of analyzing the outcome of two key conferences; namely the grand economic conference in 1982 and the “Egypt Economic Development Conference (EEDC): 'Egypt the future'” in 2015.
He expounded that these two events were held in exceptional circumstances in Egypt; the first was held after the 1973 war when Egypt was loaded with problems, while the second ensued major crises in 2011 and 2013, topped by an unprecedented terrorism wave in Egypt.
He reviewed the shortage of butane gas cylinders and main supply commodities during that period.
Prime Minister Moustafa Madbouli said the grand economic conference for which late former president Mohamed Hosni Mubarak focused on the economic problems and means of rectifying the economic course in addition to laying down a development strategy.
He highlighted that this conference unraveled 10 major problems in Egypt, topped by population explosion, fluctuating exchange rate, budget deficit, foreign debts and deficit in trade balance.
Prime Minister Moustafa Madbouli said the 1982 conference highlighted the importance of changing the consumption trend as consumption rate tripled at the annual level.
He added that inflation rate between 1980-1982 reached 20 percent.
He reviewed the role of the public and private sectors during this period, noting that 372 companies were suffering from many problems and there was a need to enhance the role of the private sector in the Egyptian economy.
Prime Minister Moustafa Madbouli reviewed the indicators for governments' response to economic imbalance from 1982 to 2011.
He said the volume of state investments in 2011 reached 40 billion Dollars.
Reviewing the link between debt and gross domestic product (over 30 years from 1981 to 2011), Prime Minister Moustafa Madbouli said the debt volume exceeded 100 percent of the GDP within 19 years.
He added that a report was issued by the World Health Organization (WHO) in 2015 saying that Egypt had the highest virus C rate.
Prime Minister Moustafa Madbouli said Egypt has suffered for years since 2011 from a drop in growth rate and rising unemployment rate.
He referred to the losses encumbered by the Egyptian economy - which stood at about dlrs 477 billion - over the political instability and terrorism wave which Egypt witnessed over the past years, noting that from February 2011 to May 2013, Egypt's credit rating dropped six times.
Prime Minister Moustafa Madbouli said the Egyptian state responded to the challenges facing it by organizing the 2015 conference under the theme of "the future of Egypt, which tackled means of restoring macroeconomy stability, implementing national projects and improving the investment climate, pointing out that the economic growth rate in 2022 hit 6.6 percent.
He explained that the World Bank in its report expected the growth rate to reach 4.8 percent in 2022-2023, thus becoming the highest rate in the Middle East and Africa's economies, noting that Egypt managed to reduce the unemployment rate to its lowest level.
Prime Minister Moustafa Madbouli said the International Monetary Fund expected Egypt to decrease the unemployment rate to less than 7 percent within the coming four or five years, highlighting that food security projects and pushing forward the wheel of economic development contributed to downing the inflation rate since the international crisis' commencement.
In this respect, he referred to wheat silos projects as well as projects for expanding the agricultural land in New Delta, East Owainat and Toshka.
He added that the state's debt declined from 103 and 100 percent in 2016 and 2017 to about 80 percent, expecting it to further decrease to 75 percent.
Prime Minister Mostafa Madbouli said emerging countries' economies seek loan financing at a certain stage to enable them to pump investments and realize aspired development.
He said: "We as Egyptians have a long conceived perception that the currency exchange rate is strongly linked to economic resilience, thus whenever the pound plunges, this would be considered as a downward trajectory indicating poor economic performance," adding: "On the contrary, countries sometimes intentionally adhere to adopting such measures to strengthen the economy, up exports and promote the investment wheel. "
He pointed out that according to economic experts the situation in Egypt like in many other countries, implies curbing inflation.
Madbouli said the State's general budget has achieved a primary surplus, noting that Standard and Poor's (S&P) maintained Egypt's foreign and local currency credit ratings at "B" level with a "Stable Outlook" for the second time in 2022.
The International Monetary Fund (IMF) expected Egypt's gross domestic product (GDP) to reach 5.9% in 2022, said the prime minister.
Madbouli said Egypt allocated half of public investments to infrastructure, transport, education and health because the private sector was not capable of pumping investments in these sectors at this time.
In 2105, Egypt had an electrical capacity deficit of 6,000 megawatts but after carrying out mega development projects, we now have a surplus of 16,000 megawatts, he added.
In 2015 also, the government signed gas exploration agreements with British Petroleum and Eni companies and Zohr gas field was discovered and was planned to be operational in 2021, he said.
But this meant that the Egyptian state would have continued to import gas over the past period, and the political leadership was determined that this project would come into service in the shortest possible time. So more investments were pumped into the project and it was finalized in record time to place Egypt in the fifth place regionally speaking in terms of gas production that hit 58.5 billion cubic meters on an annual basis, he added.
Madbouli said Egypt's petroleum exports jumped 109% in one year and for the first time Egypt's petroleum exports achieved last year 18 billion dollars compared with 8.6 billion dollars the year before.
A World Bank report, issued in 2014, indicated that Egypt's annual losses in Greater Cairo only are estimated at 8 billion dollars as a result of traffic congestion and it is expected that these losses will reach 18 billion dollars in 2030.
The State built 7,000 kilometers of roads and developed some old routes, stressing that it is very difficult and costly for any country to repair something that was destroyed and it is much easier, faster and less expensive to build something new.
Making road expansions in the midst of population clusters and slums is an "imaginary challenge", noting that compensation paid to people of shanty areas cost the State 8 billion dollars.
Madbouli said that his government has, since 2014, been working to build about one million residential units, affirming that work is underway to establish 30 new smart cities, aka fourth generation cities, the premier told the conference.
Madbouli said some 425 billion pounds have been allocated for the elimination of shanty towns and unsafe areas across Egypt, noting that images of those places are now something of the past.
He touched upon big strides in the field of construction that earned Egypt five international prizes for different projects.
The prime minister also talked about big investments in education, pointing to an increase in the number of classes from 5,600 in 2014 to 21,000 last year.
Madbouli added new schools are also being built, putting the total number of schools in Egypt at about 56,000 or more, saying: “We need at least 20,000 to 25,000 new classes each year to be able to cope with over population.”
Madbouli further said in 2015, Egypt had only 49 universities before an additional 39 were built across the country.
As for the health sector, Madbouli stated that his government doubled the volume of public spending with the aim to improve medical services offered to citizens.
He also underscored many initiatives launched by the State, citing a national campaign to eliminate Hepatitis C Virus, which he considered an unprecedented achievement in Egypt.
The prime minister also talked about the “Decent Life” project, which cost over 700 billion pounds and aimed at providing a decent human life to some 60 million residents of villages across Egypt.
Mabdouli pointed out that Egypt has worked to avoid negative growth while recovering from repercussions of the coronavirus pandemic and the Russian crisis for its economy.
He made it clear that scenarios have been outlined to handle inflation, economic shocks and global crises, noting that the conference the unemployment rate had reached 15.4 percent before rebounding to 7.2 percent now.
Mabdouli affirmed that improving the investment climate remains one of the hardest challenges facing Egypt.
He said his government has been acting at the legislative and institutional levels to support businesses. Six investment-friendly bills have been passed into law, while four others are ready to be referred to parliament for ratification. All the proposed draft laws are meant to automate and facilitate procedures and save time, the premier noted.
Madbouli said always criticized for not respecting intellectual property, Egypt has this year outlined a strategy to protect such right.
He also spoke of steps taken to activate the role played by a ministerial committee to settle conflicts. A unit has also been formed to handle problems of investors, Madbouli said, pointing to an expansion in establishing investor service centers in Egypt.
Madbouli also commented on reports critical of Egypt’s land pricing policies, noting that land lots allocated for investment have been defined, with 30 million square meters being set for industrial use.
Madbouli explained that only 10 percent of the allocated lots (three million square meters), however, have already been operational, noting that investors say that the remaining 27 million square meters are yet to be fully developed.
Madbouli added that upon request of investors, the government has decided that the allocation of industrial lands should be either through ownership or usufruct.
He also talked about a bunch of incentives launched by his government last year with the aim to encourage investment in Egypt.
He also highlighted efforts exerted by the government to upgrade the infrastructure, as well as investment and the free and industrial zones.
Unfortunately, a survey of 2,500 industrial facilities – conducted just two days ahead of this conference – revealed that they had no information about all such state measures, Madbouli said.
It is a problem of communication, he said, hoping that a system would be set up to make sure the smallest investors are aware of all state measures.
Madbouli pointed out that over the past 10 years, Egypt has been through five crises, including the emerging markets problem, the Covid-19 pandemic and the Russian-Ukrainian tension, however, he added, Egypt came out of all those crises in an exceptionally strong position and with positive growth rates.
Madbouli told the conference that Egypt’s growth rate reached nine percent during the first half of 2021-2022, noting that this was a sign that the Egyptian economy was recovering.
He cited excerpts from the Financial Times which showed that Egypt had survived the global downturn much better than other countries.
Madbouli said his government is working to increase exports to 100 billion dollars and revenues from tourism to 30 billion dollars, adding that a new program with the International Monetary Fund (IMF) has been outlined with the aim to maximize the participation of the private sector in economic activities.
He also pointed to a group of social protection measures meant to support those harmed due to any economic burdens.
Madbouli concluded his speech asserting that this conference is not to argue about the past, rather to agree on a roadmap of the Egyptian economy that could be translated into applicable plans that would contribute to maintaining the stability of Egypt.
El-Sisi made it clear that the two deals helped secure an annual of some 120 billion dollars used to operate power plants, saying: “Praise be to Allah that we could discover the Zohr field, without which Egypt would have remained in the dark because we can’t possibly secure two billion dollars needed to operate the electricity stations every month – that is at the old gas prices.”
He added that Zohr field – believed to be the largest-ever gas discovery in Egypt – would not have possibly been found had the two demarcation pacts not been signed with Cyprus, Greece and Saudi Arabia, noting that given the current gas prices, purchase and operation costs could reach 10 billion dollars monthly; i.e. 120 billion dollars every year.
El-Sisi said that Eni, the Italian company that oversaw gas exploration in the Zohr field off the Mediterranean Sea, had demanded a five-year deadline to accomplish the mission, adding that he asked to cut it down to only 18 months and vowed to immediately solve all problems within Egypt’s maritime boundaries.
He pointed out that refinery lands that would normally be licensed within two to three years got the authorizations needed in only two hours, highlighting that it has been like non-stop work over seven years to make such big achievements across Egypt.
Egyptian economic expert Mohamed El-Eryan addressed the economic conference via a recorded message, in which he said that world countries are facing major challenges topped by economic problems pointing out that such challenges come from advanced countries.
El-Eryan said that most of concentration in the economic conference currently in sessions in Cairo will focus on the future economic outlook, chances and Egypt's huge potentials.
He added that instability in advanced countries complicates conditions in developing countries.
He further warned that the worst has not come yet as the slow growth in world economies causes high inflation and that the Russian-Ukrainian crisis would worsen the situation worldwide.
Second Panel Discussion: "International Financing Opportunities to Support the Private Sector"
The second panel discussion of the economic conference began with a speech by President Abdel Fattah El-Sisi, in which he said the State had to take drastic measures to address economic problems witnessed by the country in the past 50 years.
The President added that decisive solutions and understanding from public opinion were required to move ahead with the economic reform path.
He asserted that decision makers should take into account the political, social, cultural and intellectual factors when offering a path for economic reform.
President El-Sisi pointed out that he made the best use of the great popular support in 2015 to initiate the process of reform and construction.
The president went on to say that several initiatives and proposals were tabled to enhance the State's capacity, citing the achievements made in the health sector.
In this regard, President El-Sisi said the State has succeeded in eradicating the Hepatitis C virus and ending the waiting lists for critical and major surgeries.
He added the State managed in the past three years to provide treatment and perform surgeries for about 1.4 million cases.
The president noticed that the State benefited from the available potential to relieve poverty.
President El-Sisi underlined the importance of finding practical solutions to the problems facing the country.
The president stressed the need to restructure and organize the administrative apparatus, which will lead the process of construction and reform.
Popular reactions on bearing the cost and pressures of economic reform have always been a huge and deep concern among decision-makers and security bodies, Sisi told the Egypt 2022 Economic Conference.
He added that representatives for the economics, finance, administrative control, security and defense bodies refused to launch the reform program, but I told them that if the course of economic reform is delayed, its cost will be higher, and if we delay this decision, the difficulties will be much greater.
The President said popularity of the political leadership and government was not strong enough to form a basis for a difficult and bitter roadmap that would require long and hard years of work.
He added if the Egyptians had rejected the path and the government had resigned, I would have called for early presidential elections.
El-Sisi described 2011 as an announcement of the death of the Egyptian state. "The negative impact of protests that have continued for three years caused complete instability that drained at least $470 billion, according to an estimate by Prime Minister Mostafa Madbouli."
El-Sisi said the elite class in Egypt lacks awareness and understanding to diagnose the crisis, as well as the requirements to cross the gap that the country is experiencing.
He said: "I am not defending myself but rather the path, the idea and the philosophy of governance,” adding: "We are reorganizing and restructuring the state very calmly and without confusion in all institutions."
The President also said that the first decision I made seven years ago was to stop government recruitment.
He pointed out that the cost of economic reform was increasing day by day, and the intertwining of crises created a real state of frustration, noting that the state was unable to build a reformist intellectual context for the situation, and its institutions were not practically able to implement it even if it was proposed and ascertained.
He made it clear that it is very dangerous to measure popular satisfaction with what the citizens receive directly and the ruler’s keenness to meet their demands directly, even if this is at the expense of the country’s present and future.
President El-Sisi stressed that the incidents between 2011 and 2013 almost destroyed the present and future of this nation completely.
He pointed out that political Islam groups are now asking for reconciliation after having failed to rule the country, adding that instead of admitting failure, they accused us of being against religion and considered everyone as the enemy. If they have the chance, they will act as righteous.
El-Sisi asserted that every measure taken by the state based on real understanding and the right path, no matter how hard it is, achieves the desired results.
The President warned saying that even friends and brothers have become convinced that their support for the Egyptian state over the years has formed a culture of reliance, adding they have helped us a lot, but we did not help ourselves and if we did not help ourselves, we would not succeed.
The President added that the idea was to adopt parallel axes policies or strategies: meaning stability and development at the same time.
The President concluded saying that it is not a path of a government or a leadership. It is a path of a state with its people.
Third Panel Discussion: "Policies required to enhance the ability of the Egyptian economy to face crises"
During her participation in the panel discussion on the sidelines of the Economic Conference…Egypt 2022, Planning and economic Development Minister Hala El Saeed said the assessment of the Egyptian development experience and its outlook should not be conducted apart from the surrounding international variables.
Saeed added that although reaching positive and high growth rates, these rates are not sustainable, pointing to the insufficient contribution of some economic sectors.
Saeed referred to the key challenges of the labor market, including the increase in the percentage of the unemployed females that reached 17.5 percent of the total of the female labor force in the second quarter of 2022 as well as the increase in the unemployment rate of graduates that reached 14.9 percent of the total workforce in 2021, and increase in the unemployment rate in the age group from 15-29 years that reached 16.3 percent of the total labor force in the first quarter of 2022.
The minister explained that the economic reform programs aim to create a flexible and resilient economy in addition to increasing the percentage of the productive sectors' contributions to the growth to 35% by the fiscal year of 2023-24.
She pointed to efforts to aiming at enhancing the private sector's role in the economy, saying the total private and public investments in the fiscal year of 2019-20 hit 62%, 38% of which was for the private sector.
Fourth Panel Discussion: "Financial Policies and Public Debt"
Addressing the Egyptian Economic Conference, Finance Minister Mohamed Maait said that Egypt aims to cut the public budget deficit to only four percent; a figure that has not been achieved for 42 years.
He added that the average budget deficit in Egypt for 42 years has reached 7.9 percent, saying: "The best figure was achieved after the Gulf War when debts were dropped, bringing the budget deficit to only 5 percent."
Maait noted that the budget deficit for Egypt in the emerging market reached 5.4 percent, while the current budget deficit stood at 6.1 percent,
He added Egypt did not achieve a budget surplus in 42 years until 2017-18, before continuing to achieve a fiscal surplus until 2022 at 1.3 percent, saying: "A surplus of 2.3 percent is expected to be reached in the 2026-27 fiscal year."
The minister said that the lowest debt that Egypt recorded over the past 42 years was 78.7 percent of the GDP, while the maximum debt reached 159 percent.
Maait explained that before Covid 19, Egypt was moving toward achieving the lowest public debt at 80.2 percent, but the pandemic and economic crisis caused us to stop at this point, and then we reached 87.2 percent.
He stressed that Egypt aims to reach a debt of 72 percent in the next five years, to be the lowest level in 42 years
Maait underlined that the performance of the fiscal year of 2022-23 is encouraging despite the tough global circumstances, noting Egypt achieved a primary surplus of 11% of GDP during the period from July to September, 2022.
Maait pointed to an improvement in the sectors of tourism, industry, oil and natural gas, and information technology during the FY 2021-22.
Maait said the government targets gas exports worth $1 billion monthly by January as the country's gas exports amount to $600 million, underlining the foreign direct investments had reached $8.9 billion with an annual increase of 71.4%.
He asserted that the government, under presidential directives, works on reshaping the economic structure of Egypt by empowering the private sector to have a bigger role in the economic development process.
The minister added that the current economic challenges impose the importance of maximizing industrial and agricultural production and strengthening the industry, a matter which will be fulfilled by the participation of the private sector.
Activities of the second day of the Economic Conference-Egypt 2022
The activities of the second day of the Economic Conference - Egypt 2022 started on Monday 24-10-2022, in the presence of Prime Minister Dr. Mostafa Madbouly, including 13 sessions throughout the day.
The first session discussed the policy of state ownership to stand on the general features of the state ownership policy document, competitive neutrality and its role in achieving sustainable development goals, and a review of policies and measures adopted by the Egyptian government to promote competitive neutrality.
The session also addressed a number of axes related to the mechanisms for implementing the Egyptian state ownership policy, the principles governing the presence of the state in economic activity, in addition to the strategy of the Competition Protection Authority and the prevention of monopolistic practices, as well as competitive neutrality and the enabling legislative environment for economic activity, and the role of competitive neutrality policy in strengthening economies.
It also discussed the role of competitive neutrality in enhancing the participation of the private sector in the Egyptian economy and attracting foreign direct investment.
Prime Minister Dr. Mostafa Madbouly, participated in the session, which witnessed the participation of a wide range of economic experts and businessmen.
During the second day of the conference, Head of the General Authority for Free Zones and Investment (GAFI) Mohamed Abdel-Wahab showcased the procedures GAFI had adopted to attract more investments.
These procedures include reducing the time to release operating licenses for investment projects to 20 days as well as easing the stay-related procedures for foreign investors to five years with a possibility of renewal.
Deputy Finance Minister Ahmed Kouchouk said that Egypt’s State Ownership Policy Document is an economic constitution meant to raise the private sector’s contribution to public investments and maximise its production and export capabilities.
Kouchouk noted that the document also aims to increase the competitiveness of the Egyptian private sector in regional and international markets, as well as boost the sector’s contribution to the country’s development process.
“Outlined by some 10,000 economic experts, the document proposes various mechanisms for participation with the private sector to achieve the highest economic returns on state assets,” said Kouchouk.
He also stressed that the government is seeking to provide big investment opportunities in promising sectors for businesspeople to benefit from the improved infrastructure.
The document aims to increase the private sector’s share in local economic activity and investments from 30 percent to 65 percent over the coming three years, the official said.
“The government is planning to exit from 79 business sectors and to lower its investments in 45 others for the interest of the private sector,” Kouchouk mentioned.
The conference touched upon the real-estate development sector as of the key areas of the private sector business in Egypt.
Prime Minister Moustafa Madbouli commented on the speech delivered by Deputy Finance Minister Ahmed Kouchouk, saying that the state maintains the ownership of the assets while granting the rights of full management and operation to the private sector.
Madbouli stressed that some projects need to expand and boost capital, therefore the state resorts to the private sector to increase the capital and be in charge of the management.
In this regard, Minister of Housing, Utilities and Urban Development Assem El-Gazzar said that the state is significantly boosting the sector and is acting to increase its supply, adding that the real-estate sector has lots of investment potential that could be tapped.
The minister also pointed out that the Egyptian state plans to reduce its investments in the real-estate sector, calling on the private sector to play a greater role, including in social housing projects.
For his part, Deputy of the Housing Committee in the House of Representatives Tarek Shoukry noted that the ongoing global economic crisis and the associated supply chain disruption have led to an increase in the cost of construction inputs as well as decreasing the individuals’ purchasing power, both of which has affected the sector negatively.
In this respect, Shoukry called for easing procedures to purchase housing units for citizens as well as promoting real-estate exports, which could add $3 billion to the country’s GDP.
Addressing the session Prime Minister Dr. Moustafa Madbouli asserted the Egyptian State's keenness on empowering and upping the contribution of the private sector in all sectors of the Egyptian economy.
He said the document aims to regulate relations between the State and the private sector as far as economic activities are concerned.
Madbouli affirmed Egypt is in dire need of laying down a strategy for developing industry, calling on chambers of industry in the country to establish it.
He voiced hope the conference will come up with an action strategy for strengthening industry for the coming ten years.
Madbouli said the government seeks to implement the document.
Prime Minister Moustafa Madbouli asserted the Egyptian State seeks to expand the implementation of major national projects in cooperation with the private sector in the coming period, adding that the state is in dire need of carrying out these national projects.
Madbouli said the Egyptian state helps the private sector get soft loans from international financing institutions, affirming that the coming efforts should focus on supporting the fields of new and renewable energy, solar energy, wind power, green hydrogen and green ammonia, as all these sectors are important to the State and the private sector as well, according to him.
Madbouli said several memoranda of understanding and framework agreements were signed with a number of alliances and development partners to fulfil these projects with the help of the private sector.
Madbouli further mentioned the State is looking forward that the private sector participates in carrying out different projects, saying: "The Egyptian State is ready for further expanding these projects."
Prime Minister Moustafa Madbouli affirmed tender offers aim to getting the best financial revenues for the State and maximize the value of its assets.
He added that bidders can be citizens or the private sector partners that will enjoy chances for participating with the State to increase efficiency and success of state-owned asset management.
He pointed out that tenders are governed by certain rules and conditions in the money market and the stock exchange, adding investment banks help the government and "advise the State" to choose the appropriate timing for any bids.
Madbouli underlined that Egypt faced exceptional conditions three years ago as of 2020 that started with Covid-19 pandemic and its repercussions for the global bourses in general and the Egyptian bourse in particular.
Madbouli also said that the construction of national projects will continue as long as the Egyptian state is in need of them, pointing out that the government will widen the scope of its partnership with the private sector and will seek soft loans from international financial institutions to complete the construction of such projects.
Commenting on meetings Egypt held with the International Monetary Fund and the World Bank, Madbouli said that the meetings aimed at luring foreign officials to invest in the Egyptian economy given that the private sector will not be able to fund development projects alone.
He added that the Egyptian state helps the private sector get concessional loans from international financial institutions to carry out state-run development projects, citing the Benban Solar Park project.
The premier noted that the government, as part of its partnership with the private sector, will give priority to projects in the fields of new and renewable energy, water desalination, transport, and dry ports.
He further stressed that the Egyptian state needs to provide nearly one million job opportunities a year to decrease unemployment rates despite global challenges.
Prime Minister Moustafa Madbouli further spoke highly of the possibility of engaging the private sector in partnerships with the State in the file of managing hospitals, saying: "We - as a State - are very much keen on the private sector's strong participation at present and in the coming periods in this file."
Madbouli mentioned that the State will endure the cost of investing in establishing hospitals that will be operated, financed and run by the private sector, saying: "It is important for people to get quality health service at the highest level."
Madbouli welcomed further contributions of the private sector to different sectors in the country in partnership with the government which is exerting tireless and painstaking efforts to set up and develop medical establishments.
Prime Minister Mostafa Madbouli said the government is keen on developing education to cater for the needs of the growing population.
He pointed out that the state faces challenges to establish more schools, affirming that the government is ready to provide backing for increasing the participation of the private sector to expand in building further schools for the children of middle-income families.
He emphasized that such efforts aim to enable the children of this category of families to join schools and receive quality education at reasonable costs.
Madbouli added that the state is also keen to establish technological universities, stressing that the state supports free education for all citizens.
Prime Minister Mostafa Madbouli further said that the ultimate goal of the government decision to offer some state-owned companies for sale on the Egyptian Exchange (EGX) is to maximize the benefits from state-owned assets.
Madbouli reiterated the need to choose the right time for the initial public offerings (IPOs), to achieve the highest return possible for the State, given the exceptional economic circumstances the country has been going through since the onset of the COVID-19 pandemic in 2020, which took a heavy toll on all global stock markets, including EGX.
He said that the government is currently considering transferring the ownership of some companies affiliated with the public business sector to the Sovereign Fund of Egypt, provided that they make good profits.
He added that these companies could be restructured and upgraded before offering them for partnership with private investors.
The second session discussed opportunities and prospects for partnership with international and regional financial institutions to enable and stimulate the role of the private sector in development efforts, in order to reach insights on the expected role of these institutions, and the appropriate mechanisms for financing projects included in the government's work plan and program.
The session aimed to achieve a set of objectives represented in highlighting the framework of international cooperation and development financing for the Egyptian government and its role in stimulating and strengthening the participation of the private sector in development, and identifying the various mechanisms and models for supporting the private sector in the development file by multilateral and bilateral development partners, especially in green projects.
It also addressed economic reforms that would stimulate foreign and local private sector investments, and the pivotal role of international partnerships in supporting these reforms, as well as reviewing models and success stories of the partnership between the public and private sectors achieved under the framework of international cooperation and development financing, and identifying opportunities for future international partnerships that work to provide a greater role for the private sector in implementation.
The third session discussed formulating the future roadmap for the priority sectors in the government’s work program for the coming period.
It also discussed experts' visions and ideas on what policies are required to achieve national goals in a number of priority sectors for the Egyptian economy, and the nature of the measures required to overcome the existing challenges facing these sectors.
The fourth session discussed Egypt's regional role as a center for renewable energy. During the session's activities, which are titled: "Egypt's Regional Role as a Renewable Energy Center", a number of themes were covered, with respect to the transition to a more sustainable stage.
In this regard, the session addressed the energy sector strategy until 2035, investment mechanisms in renewable energies in Egypt, the available potentials of new and renewable energy in Egypt, and foreign direct investment projects (current and future), in addition to addressing the general perception of the green energy corridor, and the initiative to integrate renewable energy with inefficient thermal power plants (10 gigawatts of renewable energy), green hydrogen projects, and the preparation of the national strategy for hydrogen, and cooperation with international companies in the field of hydrogen production.
The session also reviewed the strategy of the Ministry of Electricity and Renewable Energy for electrical interconnection with neighboring countries, strengthening the national electricity transmission network, integrating the energy produced from renewable energy projects, and strengthening the high voltage network (500 kV transformer lines / stations), as well as the development of the national grid control system, and the support for local manufacturing of electricity project tasks, renewable energy tasks, electricity transmission and distribution networks tasks.
In addition, the session tackled investment opportunities in joint projects between state agencies, the file of electric cars, the conversion of waste into energy, and water desalination through renewable energy.
The fifth session of the conference discussed the State’s efforts in maximizing ways to benefit from real estate wealth, and draw up an integrated roadmap to enhance the capability of the real estate sector.
The session also discussed, among other issues, the efforts of the Egyptian State in the real estate market from 2014 until 2022 and its revenues during this period.
The sixth session shed light on ways to boost agricultural production and enhance levels of self-sufficiency, as well as ways to deal with the challenges besetting the Egyptian agricultural sector will also figure high during the session.
The session also addressed the visions of the economists to determine the roadmap to enhance the IT technology and propose the necessary solutions to develop this industry.
The seventh session discussed issues related to human development and capacity building.
The eighth session probed the State’s plan to increase the private sector’s participation in the economic activity.
It further tackled the goals of Egypt’s Sovereign Fund for Investment and Development.
The remaining sessions discussed a host of issues related to the policies adopted by the Transport ministry in enhancing the participation of the private sector.
The sessions also addressed investment opportunities to the private sector, shedding light on the role of the capital market in promoting economic development.
They also discussed the role of Egyptian Exchange (EGX) in enhancing the private sector’s participation.
The Economic Conference - Egypt 2022 started its activities on Tuesday 25-10-2022 for the third consecutive day to discuss a roadmap to upgrade the industry sector.
This session probed a number of topics; challenges to the industrial sector in Egypt, the financing gap as one of the challenges facing the industrial sector, in addition to practical mechanisms and ways to address the financing gap crisis, solve importers' problems, and mechanisms to stimulate the industrial sector.
The session focused on facilities and measures taken by the State to support Egyptian investors, manufacturers and exporters in all sectors, along with working with business communities to make proposals to develop the industrial sector.
It also identified the causes of the financing gap, review the sources of finance, mechanisms for solving importers' problems, discuss practical ways to increase foreign exchange earnings and draw up a roadmap for upgrading the industrial sector.
Speaking at the session, entitled "roadmap to develop the industry sector: challenges and mechanisms to stimulate it" as part of the activities of the Economic Conference – Egypt 2022, Prime Minister Dr. Mostafa Mabdouli said that this session is considered to be one of the most important sessions at the conference, affirming that the industrial sector is considered to be the engine of economic growth.
Madbouli said that the decisions, which were adopted by the Central Bank of Egypt (CBE) in coordination, with the government in the issue related to the documentary credits, came after the country saw an exodus of around dlrs 25 billion in outflows in less than one month. He added that Egypt aimed to limit the amount of dollars exiting the market in order to keep the country stable.
He pointed out that it is crucial to finalize the issue related to documentary credits, adding that there are directives issued by President Abdel Fattah El Sisi to resolve this issue in less than two months.
He also said: "There are procedures in coordination with the CBE to come out of the crisis of the documentary credits," noting that as for the facilitations related to land allocation procedures, a central committee has been formed in this respect.
He highlighted that the Industrial Development Authority (IDA) has been assigned to issue the entire license on behalf of all parties, affirming that the State rules out any option related to the closure of any entity.
He, further, asserted that the State will give a chance to any factory not complying with environmental regulations to adjust its status.
Prime Minister Mostafa Madbouli directed Industry and Trade Minister Ahmed Samir to grant factory owners or developers a chance to adjust their position before closing any facility.
He said factory owners or developers are obliged to submit a commitment at the Industrial Development Authority (IDA) on their adherence to the environmental and civil protection standards without approval from anybody.
Madbouli stressed that there should be a chance for adjusting the business owners' status before issuing orders of closing any industrial facility.
Minister of Trade Ahmed Samir delivered a speech during the session entitled “the roadmap to develop industry sector: challenges and mechanisms to encourage the sector which comes as part of the activities of the final day of Egyptian Economic Conference 2022.
Minister of Trade Ahmed Samir said the coronavirus crisis extremely affected the trade movement around the world, pointing out that each country handled the crisis of coronavirus in its own way.
He said that the countries of the world vaccinated its peoples so that the trade comes back to its regular movement, but there was irregular trade and industry movement, adding that some countries were planning for economic projects for the post-coronavirus period, but the crisis continued.The Closing Session
President Abdel Fattah El-Sisi participated in the closing session of the Economic Conference - Egypt 2022, which was organized by the government over three days in the new administrative capital, in the presence of Parliament Speaker Hanafi Jabali, Prime Minister Dr. Mostafa Madbouly, a number of ministers, senior statesmen and a wide elite of the leading economists, thinkers and experts.
The session began with screening a documentary film on the highlights of the conference sessions, which was launched over three days under the auspices of President Abdel Fattah Al-Sisi.
The documentary film indicated that the conference included 19 sessions with approximately 30 working hours, with the participation of more than 240 speakers.
General Coordinator of a national political dialogue Diaa Rashwan asserted that the Egyptian Economic Conference 2022 guarantees diversity and scientific precise handling.
He said that all the sessions of the event were aired in the TV, adding that all the sessions of the national dialogue also will be aired in the TV.
He asserted that there is nothing to be hidden from the citizens or the world.
He said that the basic outcome of the event is that the nation is for everyone.
Recommendations of the Economic Conference – Egypt 2022
Diaa Rashwan, Head of Egypt's Journalists Syndicate and General Coordinator of the National Dialogue announced during the closing session a list of the recommendations and proposals issued and approved during the conference, pointing out that These are based on the opinions and interventions of experts and specialists who participated in the conference sessions during the three days of its holding.
Rashwan stated that the conference reached 200 recommendations, adding that the government has decided to form a committee to follow up and implement them.
Fiscal and Monetary Policy
On the axes of fiscal and monetary policies, the recommendations included working to continue reducing the debt-to-GDP ratio, maintaining Egypt’s ability to achieve a primary surplus to boost the state’s ability to pay its obligations, as well as accelerate efforts to activate the derivatives market for currency and futures contracts as a tool against the risks of exchange rate fluctuations.
Additionally, the speed of reaching an agreement with the International Monetary Fund and the importance of exchange rate flexibility to reflect market dynamics of supply and demand as a tool to absorb external shocks.
Private Sector Participation
On enhancing private sector participation, the recommendations included expanding the ownership base by focusing on exits via prioritizing publicly listing on the Egyptian Exchange, followed by increasing their capital through the entry of strategic investors and specifying periods of time for approval of requests submitted by investors, so that the delay in the entity’s response is considered an implicit approval to start practicing the activity.
It also includes boosting the Sovereign Fund of Egypt’s role in the private sector by transferring a number of state-affiliated companies to it, as well as expediting the disbursement of export subsidies to the sectors eligible for support, once the supporting documents are submitted.
Priority Economic Sectors
When it comes to priority economic sectors, the recommendations included reforming the system of cooperatives and unions associated with agricultural activity, through structural, institutional, financial, and administrative reform, in order to support their ability to play a greater role in the food security file, including cooperative marketing, production requirements, and contract farming agricultural extension, agricultural groupings, and others, in addition to finding rapid transport lines to enable fresh agricultural exports to reach the target markets as these perishable products, with a focus on lines that are of relative importance and have a relative weight in the volume of agricultural exports.
Recommendations also included facilitating obtaining financing loans for health projects, especially in new communities with soft loans and distinguished interest, as well as facilitating partnership procedures with the state in existing and new hospitals, through the private sector management of health facilities under the franchise system. In addition to providing an integrated package of tax and financing incentives.
This is to encourage the private sector to provide a variety of educational services commensurate with the different segments of society, especially the middle class, and in a manner that takes into account the objectives of spatial development in the different governorates, Rashwan explained.
Studying the introduction of amendments to the contracts for connecting electricity to factories so that they become bankable, as well as taking executive measures that would export real estate globally and promote the real estate product through the state and the private sector, with the importance of developing a supportive and stimulating executive framework was also included.
In addition to establishing a special economic zone for the high-tech information and communication technology industry in the near term, resorting to the whitelist mechanism in which these companies are registered, in addition to unifying the entity for collecting fees for investors in the tourism sector, with the speedy issuance of the executive regulations of Law No. 8 For the year 2022, regarding the issuance of the Hotel and Tourist Establishments Law, Rashwan added.
To create a reliable industrial base and to provide hard currency, there was a recommendation for the expansion of the local manufacturing of railway mobile units, electric tracks, and spare parts.
Furthermore, it included the recommendation to expand the participation of both local and foreign private sectors in the management and operation of all transport facilities, which would allow for the exchange of experience and ensure good services are provided to users and maintained while working to amend legislation, laws, and regulations.
Developing Industrial Sector
For the development of the industrial sector, the recommendations included the speedy completion of the integrated vision of the national industry strategy, targeting some important industries, and deepening local manufacturing, especially in the engineering, chemical, textile, and food industries.
To develop industrial exports, programs must be created to respond to export burdens and facilitating procedures for accessing new markets, activating the role of commercial representation offices and international exhibitions.
The final recommendation is to transform industrial areas into integrated residential cities and provide more housing for workers to reduce the cost of their transportation and grant land to factories.
President El-Sisi’s speech at the closing session of the Economic Conference - Egypt 2022
President El-Sisi asserted that Egypt is committed to implementing all recommendations and outcomes of the economic conference.
El-Sisi pointed to the launch of the national dialogue in April to listen to each other in light of the global circumstances and challenges as well as keeping in touch despite the differences.
He noted that the most important thing is how to implement the conference's suggestions.
President El-Sisi said the government will surely face problems in implementing the conference's recommendations, asserting that the conference should have stable institutional mechanisms that should be with the government.
He emphasized that there should be a stable economic platform every year to be a statement of account, noting that the leadership and government periodically receive a report every three months about the achievements which the government accomplished.
El-Sisi said: "I do not consider myself as Egypt's president but a human who was asked to protect his homeland."
President El-Sisi pointed out that the matter of the written divorce document became unenforceable because of the refusal of some institutions, which claimed that they would be supporters of the leadership if they approved the divorce document.
He asked whether the Islamic and Christian institutions would intensify their efforts to support the government and president.
The president also criticized remarks made by some Egyptian businessmen that the state does not allow competition, saying such remarks do not encourage to lure foreign investment in Egypt.
He affirmed the importance of developing ports across the country to meet global trade needs, recalling the experts' suggestion about the participation of the private sector and investors in this development process.
El-Sisi said: “I called on Transport Minister Kamel El Wazir to establish Ain Sokhna Port and he pointed out to a lack of financial capability to do so, therefore I asked the army's assistance," adding: "Are the businessmen ready for pumping EGP 40-50 billion to establish the port without knowing its revenues?"
President El-Sisi said said when he asked El-Wazir to establish development works of Mehwar El-Tameer (El-Taameer Axis) in Alexandria, but he told him that it would be finished in FY2024-2025. Therefore, he tasked the Armed Forces to finish it within one and a half years noting that the 55-kilometer-road was implemented for EGP 30 billion.
The president recalled his first meeting with the investors when he was a presidential candidate, saying he told them he needed EGP 100 billion to face the ramifications of what happened in 2011 and 2013.
He thanked the Armed Forces for their role in supporting the state and achieving development.
President El-Sisi said noted that what had been implemented over the past five years equals what had been done during 100 years.
The president asked about the private sector's readiness for contributing to developing the industrial sector after the state finishes its role in this file.
He added that he did not ask the private sector to invest in the ports, airports or the railway.
El-Sisi also mentioned that the state needs about 60,000 classrooms annually to accommodate each about 30 to 40 students, adding the country needs EGP 60 billion to establish new classrooms nationwide.
President El-Sisi asserted the importance of achieving a balance between fulfilling basic needs and establishing development projects.
El-Sisi touched on the low salaries, saying: "Whoever works for less than EGP 10,000 will find it difficult to live."
The president noted that he pays attention to all sectors inside the state. He denied claims that national universities have been established to serve the rich only, saying that they aim to create a better educational environment at a lower cost.
He called on the private sector to engage in the operation and management of hospitals.
He also pointed to the increasing cost of land reclamation and cultivation, clarifying that one million feddans would need EGP 150 billion to be cultivated.
El-Sisi affirmed that the State is ready to provide every possible support to investors, and hold a transparent in-depth dialogue with specialists in any domain to bring about a positive change.
He wondered if the State could offer free education for all as stipulated by the constitution, noting that a great number of economists, some of whom are among the conferees, had declined to take over some ministerial portfolios in 2014 for fear of failure.
Reiterating his commitment to maintain his support for state-owned and army-affiliated companies, while safeguarding the interests of workers and their families, El-Sisi asserted the need to change the attitude of the companies that cannot meet their obligations in alternative housing projects, such as Asmarat and Bashayer Al Kheir projects.
El-Sisi further said that the State needs $1 trillion for public expenditure on an annual basis, highlighting the need to push for further development on all fronts at the same time, including those of economy, education, media, and culture.
El-Sisi also touched upon the problem of overpopulation and how the Egyptian drama tackled it since the times of President (Gamal Abdel) Nasser, without resolving it.
He wondered if the media, religious, and educational institutions had consolidated their efforts to face up to the challenge of overpopulation as an obstacle along the nation's road to development.
El-Sisi stressed that a good understanding of religious texts, including the Prophet Muhammad's sayings, must be taken into account while tackling the overpopulation issue. He noted that under the teachings of Islam persons should learn to live within their means and not rely on others or the State, to bear their household expenses.
El-Sisi said the ongoing global challenges call for expanding the State's social safety net to alleviate citizens' burdens.
He remarked that offering people cash support is not in the country's interest, highlighting the importance of changing people's consumerist attitude.
President El-Sisi said added that the state is working on creating attractive jobs for low and limited-income segments, noting that the country has a workforce of about five to six million nationwide.
President El-Sisi also stressed the State's support for small and medium-sized industries, and underscored the need to adopt a holistic vision by the State as well as industrialists to improve incomes.President El-Sisi said concluded his remarks by instructing General Coordinator of the National Political Dialogue Diaa Rashwan to organize a religious conference bringing together people of all faiths, even non-believers, which would set a successful model for coexistence.