The comprehensive set of economic reforms launched by the Egyptian government in partnership with the International Monetary Fund (IMF) are starting to pay off. Back in 2014, when Egyptian President Sisi took office, Egypt?s economy was in a rough situation. Waves of terrorist attacks drew away tourists, decimating an industry that represents 12% of Egyptian workforce. Political disorder was equally worrisome. However, since reforms were launched in November 2016, Egypt has managed to stabilize and significantly improve its fiscal and monetary position. Strong security measures taken by Sisi?s government have resulted in a surge of tourism revenue, from 1 to 5 billion dollars. The World Bank predicted that Egypt?s GDP will grow by 5% in 2019, and that growth will increase to 5.9% by 2020. Perhaps the most important news from the World Bank Economic Outlook for Egypt is the country?s eradication of extreme poverty, dropping significantly from 27.8% of Egypt?s population in 2015.
Harvard University?s Center for International Development recently ranked Egypt the third fastest growing economy, after India and Uganda, and projected GDP growth to reach 6.63% by 2026. On July 5th, Egypt announced that it had a primary budget surplus for the first time in 15 years. In a recently published IMF report, Egypt must implement 16 new reform measures in less than a year. Fuel subsidies should be eliminated by mid-June next year and Egypt will have to address foreign reserve management, transparency of public finances, accountability of public enterprises, labor force participation for women issues, and implement measures to further strengthen fiscal accountability. Measures also include ensuring the state-owned enterprises procurement rules are consistent with the new government procurement law.
According to AmCham Egypt Inc. CEO, Hisham Fahmy; ?Egypt-U.S. commercial relations have always been robust. While challenges facing businesses still do exist, American companies continue to see Egypt as a competitive manufacturing and export hub for the region. During the past few months companies including MARS and Cargill have expanded their presence. Next October, AmCham Egypt, together with the U.S. Chamber of Commerce and the U.S.- Egypt Business Council will organize a major business mission to Egypt, to explore potential opportunities within different sectors and reiterate the commitment of U.S. companies to Egypt?s market?
Vast offshore gas discoveries are already positioning Egypt as an important regional energy hub and government determination to follow through with reforms in the administration, education, health, and financial sectors are promising. Egypt?s Ministry of Social Solidarity?s recently launched campaign, ?Two is Enough,? is another bold step in the right direction. This campaign is supported by President el-Sisi, and is an effort meant to influence young couples to stop having more than two children. Natality is the key problem in Egypt, with country surpassing a population of 100 million. No economic plan can sustain such a strong population growth rate and Egyptians know it. A lack of jobs and financial means to support large families is fertile land for the growth of extremism ideology, making the newly launched ?Two is Enough? campaign perhaps the most important effort to reduce natality rate in the country. No child in the world is born an extremist or terrorist, but, in the face of poverty and desperation, the chances of embracing extremism is multiplied. Egyptians are determined to view the reforms in light of their long-term benefits. However, they do feel the pain as living expenses are now much higher while salaries remain static. But it looks like Egypt will build a solid economy in the years to come, and will be able to turn its focus to reforming and building a diverse political life that will raise the country to new heights.
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