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 as credit lines to commercial banks for the financing of SMEs.
These funds represent 32.3% of the total development financing for Egypt during 2020, the ministry said in a statement on Tuesday.
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 titled “International Partnerships for Sustainable Development”.
The government recognized that engaging with the private sector is critical to accelerating the private sector’s embracement of environmental, social, and governance (ESG) principles.
This helps the country to 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 to achieve a circular economy.
Private sector engagement requires coordinated action, inclusive dialogue, and common understandings of 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 to achieve significant progress.
International Cooperation Minister Dr. Rania 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 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.
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