The World Bank Group on Monday urged Egypt to introduce more transparency about the state’s economic activity, a step it said would encourage much-sought private sector investment.
A sweeping reform programme that began in late 2016 has boosted macroeconomic performance and “restored confidence in the economy,” the World Bank and International Finance Corporation (IFC) said in a joint report released on Monday.
However, the moves “have yet to trigger a marked and sustained increase in non-extractive private investment and exports,”
In recent weeks, Egypt has announced an initiative to offer up to full ownership in as many as 10 military-held companies as it seeks to allure more private sector investment. Authorities seek to boost the private sector’s contribution to the economy to around 60 percent by June 2024 from close to half now, Planning Minister Hala al-Saeed told Bloomberg.
Egypt has significant room to export more and boost its external competitiveness, the World Bank group said.
A transparent state-ownership policy and governance framework, streamlined tariffs and customs along with better transport connectivity could all play a part, it added.
The Washington-based lender said while Egypt has a growing domestic market and is close to international markets, “in recent years, perceptions of a growing and privileged role of the state in economic activities” have deterred private and foreign investment.
Minister Saeed said that although the state had to step in during a period of political instability after the 2011 uprising, “all state institutions are now eager for the private sector to have a greater role in development projects.”
Egyptian government about three years ago identified around 20 state-owned companies that could either be listed on Egypt’s stock exchange or see additional stakes offered. One had been offered before the coronavirus pandemic spurred a delay, although authorities have indicated preparations are underway for a resumption.
