Tue, 08 Feb 2022 - 02:30 GMT
Tue, 08 Feb 2022 - 02:30 GMT
CAIRO - 8 February 2022: The World Bank launched a new Egypt Economic Monitor, The Far-Reaching Impact of Government Digitalization, at an event co-organized with Egypt’s Ministry of International Cooperation. This report details the World Bank’s assessment of Egypt’s latest economic developments and outlook, and provides analysis focused on the government’s progress toward digital transformation.
The report says Egypt’s macroeconomy continues to show the resilience it has displayed throughout the COVID-19 pandemic. Macroeconomic stabilization—and the energy sector reforms implemented in recent years—have helped build strength, and the mobilization of international financing has contributed to preserving ample foreign reserves. However, like the rest of the world, Egypt’s near- and medium-term prospects remain clouded by global COVID-related challenges, such as variants and vaccine deployment.
Under a baseline scenario that assumes the COVID-19 situation will gradually improve, Egypt is expected to revert to its pre-pandemic growth path, reaching a growth rate of 5.5 percent in FY2021/22. More progress on structural reforms is critical to unlock the potential of private sector activity and sustain the recovery, drive productivity growth, and generate high-earning jobs.
While exports of goods and services are projected to continue recovering, external financing requirements are expected to remain rather elevated until FY2023, as imports will increase with the resumption of growth and the recent appreciation of the real exchange rate. Global financial conditions may tighten and are expected to raise the cost of foreign financing in turn.
On the fiscal front, Egypt is expected to continue pushing ahead with reforms to contain the budget deficit and government debt-to-GDP ratios. Greater predictability in fiscal balances and the trajectory of public debt would involve disclosure on payment arrears and additional details on gross financing requirements, including those that stem from other public sector entities that are not part of the central government.
The Focus Chapter of this report is dedicated to the topic of Government Digital Transformation. Egypt has been adopting digital technologies to modernize core government systems, and providing online service portals, giving the country a relatively advanced level of government digitalization.
For recent digitalization efforts to realize their potential and enhance governance and public service delivery, reforms need to be focused on: (i) Simplification and streamlining of government processes and procedures—a crucial complement to the government’s digital transformation journey; (ii) Roll-out of “end-to-end” digital solutions—where digital transformation occurs at every step throughout a given governmental process— in order to depart from old, inefficient procedures, such as paper-based work, in addition to ensuring “inter-operability” of related government systems for data and information sharing, as well as efficiency gains; (iii) Strengthening the foundations of the Digital Economy: This will require (iii-a) continuous investments in digital infrastructure across the country to ensure the uninterrupted availability of essential digital government services and universal access to high quality internet, (iii-b) promoting digital skills, (iii-c) incentivizing use of digital financial services, and (iii-d) ensuring a legal and regulatory framework conducive to the digital transformation of the economy.