Egypt’s House of Representatives has endorsed an agreement with the African Development Bank (AfDB) for $131 million to fund the initial phase of the Private Sector Development and Economic Diversification Program, which is part of the national state budget support. This decision, captured in President No. 383 of 2024, was confirmed during a parliamentary general session.
Enhancing international collaboration
Rania Al-Mashat, Egypt’s minister of Planning, Economic Development, and International Cooperation, remarked that the partnership with the AfDB enhances ongoing collaborations with international entities to execute the national structural reform program, boost the budget, and stimulate private sector growth. This approval comes on the heels of a recent parliamentary endorsement of the first phase of a macroeconomic support initiative with the European Union, valued at EUR1 billion.
Objectives of the development program
Al-Mashat further outlined that the Private Sector Development and Economic Diversification Program has two main goals. The first goal is to promote private sector investment by improving the investment landscape, enhancing competitive frameworks, and ensuring equitable trade practices. The second goal focuses on boosting economic diversification and facilitating a green transition by strengthening critical productive sectors, particularly in industry and agriculture, while also advancing the shift toward a green economy.
Government’s commitment to reform
She highlighted that these initiatives align with the government’s ongoing efforts to enhance the investment environment and pursue economic as well as structural reforms. The first component of the program includes measures such as the establishment of the Supreme Investment Council, amendments to Investment Law No. 72 of 2017 to introduce new incentives and more flexible criteria for investment projects, the elimination of tax and fee exemptions for state-owned entities involved in investment activities, and the establishment of the Egyptian Intellectual Property Office.
Focus on economic diversification and green transition
In terms of the second component, which aims to support economic diversification and the green transition, numerous reforms have been implemented. These include the introduction of legislation to regulate unlicensed industrial facilities and the expansion of land available for renewable energy projects, with 26,000 square kilometers of state-owned land allocated for this purpose.
Commitment to sustainable development
Al-Mashat stressed that enhancing macroeconomic stability and executing structural reforms are fundamental to the Ministry of Planning, Economic Development, and International Cooperation’s mission. She stated that Egypt is striving for sustainable and inclusive development through the coordinated efforts of its various institutions, guided by comprehensive strategic plans. She also reaffirmed the country’s dedication to continuing structural reforms to enhance the business environment and propel the green transition.
