Egypt discusses private sector role with int’l financial institutions

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Thu, 30 Apr 2020 - 01:52 GMT

Minister of International Cooperation Rania Al-Mashat - Press Photo

Minister of International Cooperation Rania Al-Mashat - Press Photo

CAIRO – 30 April 2020: Minister of International Cooperation, Rania Al-Mashat, held a virtual roundtable with representatives of international financial institutions and representatives of the private sector in the fields of manufacturing, energy, agribusiness and logistic services.

The meeting, that was called on by the Minister, was organized by International Finance Corporation (IFC) and attended by officials from World Bank (WB), IFC, European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD) and African Development Bank (AfDB).

During the meeting, Al-Mashat emphasized the key role of private sector as a catalyst for development and the need to enhance collaboration among all development stakeholders, especially during times of predicaments.

She also urged private sector participants to bring forth the main challenges they encounter as a result of the COVID-19 economic implications, including supply and demand disruptions, as well as their views on needed measures to overcoming these challenges and identifying potential opportunities.

The minister elucidated that her ministry fosters multilateral partnerships among the Egyptian government, international financial institutions and the private sector, to mitigate the economic and social adverse effects of the pandemic.

She further noted that the ministry is keen on engaging the private sector in the development process through promoting partnerships, synergies and integration among development cooperation financing and private sector investments.

Al-Mashat referred to the new narrative launched by the ministry with development partners aimed at achieving sustainable development through leveraging partnerships in priority sectors. The three main pillars of this narrative are P&P&P: People at the Core, Projects in Action and Purpose as the Drive. Another important form of inclusive partnerships in promoting sustainable development is Public Private Partnerships, which contributes to identifying existing gaps, especially following COVID 19, and provides assistance across various sectors to millions of beneficiaries, thus enabling citizens to unleash their full power.

During the meeting, private sector representatives referred to the challenges they faced as a result of the economic implications caused by the pandemic, and commended the transparency and risk management measures taken by the Egyptian Government to enable private sector enterprises to continue operation and production, working even during curfew times. This helped maintain balance between the production wheal in plants and taking the necessary precautions to protect workers on the other hand, as sterilization of plants has become a basic part of their work. It was also noted that the food industries sector was able to continue to offer food products in spite of the challenges of market supply and transportation operations, which all had their toll on the supply chain, besides the impact on shipment to other countries.

Private sector representatives revealed that 2021 formed the real challenge if the crisis continued, as it would be expected that demands for commodities would be affected, and that there would be clients failing to pay for products. Accordingly, precautions were taken by plants and companies, and negotiations were held with insurance companies for payment collection. Availability of liquidity and operating capital fall among expected challenges in 2021. It was noted that the second half of 2020 and 2021 would be more challenging for projects, where some projects may even be suspended, should the crisis continue. However, there could be future opportunities in sectors as health and renewable energy sectors. Over the past years, Egypt has taken unprecedented measures in the new and renewable energy sector that would enable it to contribute to increasing economic growth and to achieve SDGs in spite of the pandemics implications.

Representatives of international financial institutions stressed that they will continue extending their support to the Egyptian economy to help face the crisis and to increase technical and monitory support during such critical period. They noted the importance of unifying efforts to ensure the availability of the necessary liquidity to large as well as small and micro enterprises to continue to build and enhance public private partnerships.

It is worth noting that IFC, a member of WBG, is the largest development institution worldwide that exclusively focuses on supporting and developing the private sector. Also, part of the activities of EIB and EBRD, focus on supporting the private sector. These institutions offered private sector companies credit lines for increasing liquidity following the Coronavirus crises.

On her part, Marina Wes, WB Country Director, Egypt, Yemen and Djibouti, thanked
Rania Al-Mashat for her initiative, which was the first of its kind to unify efforts of international institutions to effectively face the implications of the pandemic outbreak. She noted that it was inspiring to listen to the private sectors on-going experiences in dealing with the daily challenges posed by this unprecedented situation due to COVID-19 pandemic adding that their innovative ideas, not only to mitigate the impact of the pandemic but also to identify opportunities of growth and turnaround. The World Bank Group, is supporting Egypts efforts in implementing and financing structural reforms, projects, and policy measures to enable an increased private sector role in development, economic growth and job creation.

On the other hand, IFC Country Manager in Egypt, Libya and Yemen, Walid Labadi, stated: private sector dialogue is critical for economic growth and sustainability, especially in times of economic uncertainty. We are very excited to see the government both consult with private sector partners and support private businesses during this crisis. IFC is working with clients in various sectors to find innovative solutions to the COVID-19-related challenges they are facing and turn them into opportunities."

EBRDs Managing Director, Southern and Eastern Mediterranean Region (SEMED), Heike Harmgart, ascertained that EBRD decided to increase the solidarity parcel flexible framework from EUR 1 M to EUR 4 M, which included funds for facing the short term need for liquidity, including for the private sector. It focused on financial institutions, SMEs, and companies operating in the fields of tourism, transport, agriculture and medical supplies.

Head of EIBs Cairo office Mr. Alfredo Abad noted that EIBs assistance of the private sector was focused on rendering liquidity available, as EIB had coordinated with several European states and EBRD to provide around EUR 20 B to foreign countries that were not EU members, where EIBs contributed with around EUR 0.5 billion. In addition, EIB supported around 300 SMEs, noting that it would be willing to increase credit lines and to provide new ones, as well as to cooperate with the private sector for the production of medicine.

Other participants from international financial institutions were AfDBs Country Manager Malinne Bloomberg and Representatives of the private sector in the field of food and agriculture included Hany Berzy, Chairman of Edita for Food Industries, Karim Baraka, Representative of Savola, specialized in the food and retail sectors in the MENA region, Diaa El Din Yahia, Country Head & Regional Director of Majid Al Futtaim Group. In the field of industries, attendees included Ahmed Elsewedy, Chairman of Elsewedy Group and Reham Elbeltagy Head of the Financial Department of Orascom Construction Group. In the field of energy and logistic services, Alczar Energys Co-founder & Chief Executive Officer Daniel Calderon and the Chairman of Nile Capital Basel Roushdy attended the meeting.

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