CAIRO - 23 October 2022: Egypt Economic Conference 2022 comes in the midst of a global crisis that the countries of the world have not witnessed since World War II, Prime Minister Mostafa Madbouli stated during his speech at the conference.
Madbouli delivered a speech at the beginning of the activities of the first day of the conference, which will last for three days, under the title (The Egyptian Economy in Forty Years... What Next?)
He said that Egypt was classified by all international institutions as being one of the most affected counties by this global crisis, elaborating that the Egypt Economic Conference 2022 aims to come up with a clear roadmap for the economy during the coming period.
The Prime Minister referred to Egypt’s Economic conferences which were held in 1982 and 2015 as both took place after exceptional circumstances.
The 1982’s conference came after the victory of 1973 war and the economy was burdened with enormous problems, a policy of economic openness, and political crises that ended with the assassination of the late President Anwar Sadat, according to Madbouli.
As for the 2015 edition, Egypt was emerging from very violent political crises in a huge wave of terrorism that it had never witnessed before, he noted.
“Egypt is a young country and 60 percent of its youth are 40 years old or younger,” Madbouli stated.
Furthermore, he stated that the population increase in Egypt is equivalent to the size of the increase in 27 European countries during 30 years.
“As for the domestic product, it does not meet the increasing needs of citizens, which requires rearranging public and private spending priorities and increasing production rates,” the Premier said.
According to the Premier's speech, Egypt’s GDP growth over 20 years recorded 4.4 percent, and in some years it reached 7.2 percent and 7.5 percent.
Comparing Egypt with middle-income countries, these countries grew by 5 percent over the 20 years, so Egypt didn’t succeed in achieving the same rates, Madbouli elaborated.
Madbouli announced that the average GDP per capita over the past 20 years hit $1,360, while in similar countries it reached $1,800.
Due to the conditions that Egypt went through, the average unemployment rate recorded 9.6 percent over the 20 years, compared to 4.9 percent in other countries, according to Madbouli.
“In 1991, the total investment volume reached $8.9 billion while in 2011 it recorded $40 billion,” Madbouli said.
According to the speech, the lack of adequate housing led to the emergence of slums and unsafe areas, as well as the encroachment on agricultural land and the failure to achieve the objectives required for agricultural reclamation.
The targets required for agricultural reclamation were 150 thousand feddans annually, and the state had implemented only 77 thousand feddans before 2011, he stated.
He also referred to illiteracy rates in Egypt which hiked to 26 percent in 2011, with a decline in health services.
According to the World Health Organization, Egypt had the highest rate of infection with hepatitis C in 2015, marking a rate of 14.7 percent of the population. Every year 10,000 new infections appear, PM Madbouli pointed out.
Meanwhile, Madbouli reviewed debt figures, as he stated that debt has exceeded GDP by 100 percent, 19 times, from 1982 to 2011.
“Egypt suffered cumulative losses amounting to $477B, $20.3 billion from 2011 to 2013, average unemployment reached 13 percent, Egypt’s rating decreased 6 times in 28 months, 13 percent decline in economic growth rate, and recording 13 percent highest rate of budget deficit in 30 years,” the prime minister revealed.
“$516B.. the largest increase in indebtedness, a 7 percent contraction in capital investment spending rates,” he added.
Egypt has a plan to decrease the debt-to-GDP ratio; which might reach 90 percent this year, he pointed out.
According to the plan, Egypt would have reached a debt-to-GDP ratio of 75 percent by 2021 were it not for the COVID-19 and the Russian-Ukrainian crisis, he stated, adding that Egypt’s external debt to the GDP hit 34.5 percent.
Madbouli elaborated that 73 percent of the external debt is "medium and long-term”.
The prime minister added that according to the World Bank, Egypt will achieve a growth rate of 4.8 percentin 2022/23, marking the highest rate among the most important economies of the Middle East and Africa.
This rate comes despite the population increase, which records 21 million people, which is equivalent to the size of births in 6 major countries.
“The GDP per capita increased from $2,700 dollars to $4,000 in 2021,” Madbouli stated.
According to Madbouli, since 2015, the Egyptian economy has begun to grow steadily, and despite the the Coronavirus pandemic and the Russian-Ukrainian crisis, the growth rate of the Egyptian economy has reached 6.6 percent, and the average for this period is 5.3 percent, compared to 4.4 percent in the previous period and 2.3 percent in the years before 2015 and 2016.
Regarding the exchange rate, Madbouli said that it is not related to the strength of the economy, saying that the problem is not the exchange rate, but curbing inflation.
He clarified that some countries resort to weaken their currency measures due to the weakness of their currency to strengthen the economy, exports and boost investments.
The state has achieved an important indicator over the course of 5 years, which is achieving a primary surplus in the budget, which means that the revenues exceed the expenses, and this surplus reduces the debt, the prime minister said.
“The Egyptian state implemented major national projects amounting to LE 7 trillion, 90 percent of which were executed by the private sector,” the PM said.
He added that Egypt's petroleum exports jumped 109 percent during 2021/2022 to reach $18 billion, compared to $8.6 billion during 2020/2021.
The Premier cited a World Bank report on Egypt in 2014, where it stated that Egypt's annual losses in Greater Cairo as a result of traffic congestion reach $8B, and it is expected to reach $18 billion in 2030.
He added that the volume of investments to develop slums amounted to LE 425B, implemented and ongoing investments so far, to eliminate the phenomenon of unsafe areas, which was a disgrace to Egypt, PM
The Egyptian state has built more than one million housing units since 2014 and 2015, in addition to 30 new fourth-generation cities or smart cities, Madbouli said, stating that before 2014, the average number of constructed classes reached 5,600 annually.
The state is currently building 21,000 classrooms, and in 2022, the state registered 36 private universities, 27 public universities, 16 non-profit universities, and 9 technological universities, he added.
5 million families with a total of about 20 million citizens benefit of Takaful and Karama program, at a total cost estimated at about LE 25B, the PM said.
The prime minister said that Egypt's electrical generation capacities surged 110 percent, recording to 59 thousand megabytes up from 28 thousand megabytes, PM
“Egypt has currently a surplus of 13,000 megawatts available in the unified national electricity grid after suffering from an electricity deficit of 6000 megawatts in 2015,” he added.
Egypt achieved its dream to have a solar energy plant through establishing the Benban project which is the fourth largest solar power plant in the world, he noted.
The cost of Hayah Karima "dignified life" initiative exceeds LE 700 billion, according to the prime minister.
The various national projects implemented by the Egyptian state contribute to providing basic infrastructure and services for people, creating job opportunities and pumping money into the Egyptian economy, Madbouli said.
“Had it not been for these projects, the growth of the Egyptian economy would have been negative in light of the consequences of economic reform and the Coronavirus pandemic and the crisis of the Ukraine and Russia war,” he added.
Moreover, he said that 17 industrial complexes were completed at a cost of LE 10.2 billion in 10 governorates.
Madbouli ended his speech saying that Egypt has crossed five economic crises that can bring any country down and achieved an economic growth of 9 percent during the first half of 2021/2022.