Tue, 22 Dec 2020 - 05:55 GMT
Tue, 22 Dec 2020 - 05:55 GMT
CAIRO – 22 December 2020: The Ministry of International Cooperation secured development financing agreements with a total of $3.1 billion through direct financing to private sector companies as well credit lines to commercial banks for the financing of SMEs.
The ministry clarified in its annual report that these funds represent 32.3 percent of the total development financing for the Arab Republic of Egypt during 2020.
The European Investment Bank (EIB) with $1.9 billion, African Development Bank (AfDB) with $12 million, European Bank for Reconstruction and Development (EBRD) with $641 million, International Finance Corporation (IFC) with $421 million, Agence Française de Développement (AFD) with $167 million, and the Arab Fund for Economic & Social Development (AFESD) with $50 million, provided financing to the private sector from multilateral and bilateral cooperation, according to the 2020 Annual Report by the Ministry of International Cooperation titled “International Partnerships for Sustainable Development”.
The Government of Egypt recognizes that engaging with the private sector is critical to accelerate the private sector’s embracement of environmental, social and governance (ESG) principles. This helps the country achieve transformative changes and positive social impact in light of the purpose-driven development financing that is mapped according to the 17 Sustainable Development Goals in order to achieve a circular economy.
Private sector engagement requires coordinated action, inclusive dialogue and common understandings on the impact they can have on communities. For this reason, the ministry is pushing the frontiers of cooperation by providing new windows that allow for engaging with the private sector, via the three principles of ‘Economic Diplomacy’ with an emphasis on Multi-Stakeholder platforms that was launched in April 2020.
The development portfolio includes reform in all sectors, hammering on the necessity to incorporate the private sector in order to achieve significant progress. Al-Mashat said that the government is working to enhance the participation of the private sector in various development projects, including infrastructure, transportation, education, health, gender, and energy as a way to stimulate economic growth.
To close the financing gap, partnerships between the public and private sectors must be reinforced. Supporting Egypt’s private sector is key to build for economically resilient communities; as well as including the private sector in the decision making process brings new ideas to the table and helps revamp publicly owned businesses in a way where public enterprises can both learn and benefit.
Through partnerships with the private sector, there are over a thousand companies in the private sector and nearly 2 million Egyptians working on major national projects contributing to economic growth. This goes hand in hand with SDG 8: Decent Work and Economic Growth and SDG 9: Industry, Innovation and Infrastructure.
The Ministry of International Cooperation launched the “Country Private Sector Diagnostic” in 2020 with the IFC, titled “Creating Markets in Egypt: Realizing the Full Potential of a Productive Private Sector.” The report revealed that the launch of Egypt’s homegrown reform program improved macroeconomic stability and helped restore confidence in the economy through predictive policies that contributed to increasing the share of private investment in the economy over the recent years.
In Egypt, there are many opportunities for a productive private sector by using the ICT sector in finding digital solutions to healthcare, transportation and learning, and in promoting agribusiness and private sector investment in agriculture to improve food quality.
During the peak of the pandemic, the different countries cooperated in hope to overpass the challenging time with the least economic damage; this has given rise to a need-driven innovation. The Private Sector engagement is consequently found essential to capitalize on this wave of creativity and to catalyze the change process, as it can create transformational impact through job creation, digitalization and sustainability to address the world’s most pressing humanitarian challenges.