The Egypt Vision 2030 strategy is more of a statement of broad economic intent than a precise roadmap. However, against the backdrop of the global Covid-19 pandemic and with government policy focused on short-term mitigation efforts, the document provides as a useful reminder of the nation’s long-term economic ambitions. Launched in 2016, the strategy aims to create a “competitive, balanced and diversified economy” that supports “innovation and knowledge, social justice, economic development, and the environment”. A number of concrete macroeconomic goals are outlined in the document, including raising the nation’s annual GDP growth rate to 12%, its GDP per capita to $10,000 and its share of global GDP to 1%. At the same time, the strategy established the objective of reducing unemployment to 5%, bringing the inflation rate to between 3% and 5%, and lowering public debt as a share of GDP to 75%. While these figures provide useful targets for government planners, Vision 2030’s principal utility from an investment perspective is as a guide to potential growth sectors.
The strategy identifies nearly 80 programmes and projects to be implemented in the bid to drive economic growth through to 2030. These include the development of river transportation, entrepreneurship programmes, logistics centres and environmental projects. In addition, the plan envisions the construction of a New Administrative Capital outside of Cairo.
The General Authority for Investment and Free Zones (GAFI) has identified a wide range of sectors that Egypt’s competitive advantage make suitable for further development. According to GAFI, an expanding population and increasing levels of disposable income will drive retail sector expansion. The same factors underpin the growth of the health care and education sectors. In addition, Egypt’s rich geology is expected to support an enlarged mining industry. Energy diversification programmes and a favourable climate for solar power make renewable energy a key growth sector, while agriculture and land reclamation is expected be accelerated by the government’s drive towards food self-sufficiency. The country’s already well-developed tourism industry is set to receive a boost through an increased number of visitor sites, upgrades to security infrastructure and improvements in travel industry standards. Continued reform to the financial and insurance sectors, meanwhile, is expected to attract greater capital to the country and support growth in other industries, such as real estate, oil and gas, petrochemicals, transport and textiles.
Progress to Date
Meeting Egypt’s ambitious strategic targets presents numerous challenges. As the Covid-19 pandemic demonstrates, external factors can derail government planning and significantly affect macroeconomic performance. Prior to the outbreak of the virus, Egypt had made considerable progress in pursuing its goals. In 2019 the economy grew by 5.6%, up from 4.3% in 2016, according to the IMF. Increased income per capita is another area in which the country has performed relatively well, with $4689 per adult in 2019, according to Credit Suisse estimates, which is greater than its 2020 interim target.
In other areas, Egypt has made gains but fallen short of its intermediate goals. In 2020, for example, the country ranked 114th out of 190 countries in the World Bank’s “Doing Business” report, up from 131st in 2016. However, this is short of its objective of rising to 100th place by 2020 and highlights that it has considerable ground to make up to reach 30th by 2030. Furthermore, while unemployment fell from 12.6% in late 2016 to 8.1% in the third quarter of FY 2018/19, its lowest level since 2011, the employment rate over this period did not climb in parallel, as might be expected. The overall employment rate fell from 40.4% to 38.5% over the same period. Ensuring further progress towards the achievement of the Egypt Vision 2030 targets will require the continuation of Egypt’s process of economic reform and agile policy-making in response to Covid-19.
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