The next six years in Egypt represent a challenge for the government to improve the economic and social conditions in order to alleviate the suffering of members of society.
On January 5, 2024, Egyptian media published a document called “The Most Prominent Strategic Directions of the Egyptian Economy,” which is the result of research work by the Center for Information and Decision Support, affiliated with the Council of Ministers in Egypt.
The document includes 8 axes, including a vision for the development of economic growth and its role in Egypt’s renaissance, economic policies and their goals of supporting and stabilizing the overall economy, the role of economic sectors in leading the renaissance, achieving a competitive economy based on knowledge, and a life that lives up to the aspirations of Egyptians.
Attention was not lost on Egypt's position globally, as it was pointed out that Egypt would have a pioneering role in the global economy, in addition to paying attention to youth, and strongly activating the participation of workers abroad in the country's renaissance.
These eight strategic axes in the document were linked to the next six years (2024-2030), which is the period of the new presidency of President Abdel Fattah El-Sisi, and linked the economic and social problems that Egypt is suffering from greatly to the external causes of the Corona crises, the Russian-Ukrainian war, and the repercussions. Al-Aqsa flood.
It can be said that the eight strategic axes included in the document are generally considered goals, although the details include matters that conflict with Egypt’s economic renaissance, according to observers, such as continued reliance on financing through external sources, whether these sources are Egyptian or foreign, such as relying heavily on the formation of funds. Whether to invest in the stock market or in state-owned assets, as well as securitizing a share of dollar returns.
The government has all the capabilities to translate these goals into reality, while activating all state agencies to achieve success.
The document stems from the work of a center affiliated with the government that has all the data and information available, as well as informing the center’s management and researchers about the real capabilities of the government and the extent to which these goals are achieved within the time period specified in the next six years.
In addition to the above, this document is subject to accountability for the government by regulatory authorities and civil society, which puts the government in a state of challenge to achieve those goals declared by it before the people, and even before external parties that have financial obligations with the Egyptian government.
The document also tried to focus on the qualitative aspects in many axes, such as the role of investment and export in developing the gross domestic product, the role of green development and green hydrogen, and the development of universities and industry, in addition to paying attention to the technical aspect and artificial intelligence.
Observers believe that talk about strategic directions does not come from a vacuum, but rather through real knowledge of reality, so it was important to point out, albeit quickly, the structural challenges that the Egyptian economy suffers from – which have forced the country more than once to obtain foreign support and loans – And the country's continued financial suffering over the past 10 years.
The document did not include a reference to how to achieve these goals, and under what scenarios? Does the document assume that the current situation locally and regionally will remain as it is, or does it overlook the negative developments that await the region in light of Israel’s war on GazaAnd the possibility of expanding the circle of war, which could affect Egypt itself, as well as the fragile global economic growth situation.
The document included procedures that showed that its drafters did not take into account the existence of similar institutions that could perform these functions.
For example, the document proposes “establishing a national agency to promote investment in Egypt,” while the General Authority for Investment and Free Zones has existed for more than two decades, and promoting investment in Egypt is one of the tasks of this existing body.
The document also ignored the financing issue that Egypt suffers from, and considered external debt to be the main source of financing, so it focused on the issue of the sustainability of public debt, targeting its percentage to be less than 75% of the gross domestic product.
There was complete absence of talk about reducing the value of public debt and its ratio to the gross domestic product, while the reality reflects the existence of a major crisis in the government regarding the management of public debt due to the absence of a comprehensive view of managing this debt.
Observers believe that the document did not take into account inflation rates in its monitoring of some forms of service development during the next six years, especially since there is an upcoming step regarding devaluing the pound.
For example, in pre-university education, the document indicated a spending target of 1.8 trillion pounds during the period 2024-2030, compared to 861 billion pounds during the previous 9 years (one dollar equals 31 pounds).
Assuming that the value of the Egyptian pound may witness a decline of only about 25% during the year 2024, we are faced with a very modest real value for the value of spending on pre-university education, and so on for other aspects of spending.
Another weakness is the absence of a comprehensive picture of information. The document, for example, targeted dollar revenues in 2030 to reach $300 billion, but it did not indicate how much dollar payments would be in 2030? So that we can determine the reality of the balance of foreign transactions, and whether these strategic goals in their entirety led to an improvement in Egypt’s position with the outside world or not.
In addition, some data do not indicate comprehensive development. Regarding the oil and gas sector, the document targeted Egypt’s exports from this sector to reach $36 billion in 2030, compared to $18 billion in 2021-2022, which reflects the continuation of the policy of exporting crude, without converting it into derivatives, in order to increase the added value and the dollar proceeds.
It may go without saying that the proceeds from oil and gas exports include the share of the foreign partner, which means that the targeted proceeds are not entirely for the Egyptian treasury.
A different reality
The document focused elsewhere on a greater role for the private sector, even targeting the private sector to achieve 65% of the investments implemented, while the non-oil private sector in Egypt has been suffering from a state of stagnation for years.
On the other hand, practical practices indicate increased empowerment of army companies in the Egyptian economy, whether in terms of land allocation or control over economic activities.
Even the private army companies whose privatization was announced were not implemented, which means that the private sector was not given the appropriate opportunity to achieve the goals of the document.
As for what the document mentioned, it aims to reach revenues Suez Canal $26 billion in 2030, compared to the reality reflected in the balance of payments data for the year 2022-2023, indicating that the canal’s revenues did not exceed $8.7 billion.
There is evidence of the inaccuracy of the government’s estimates of the canal’s revenues. In 2014, when the expansion project was announced, it was announced that the canal would earn $13 billion in 2023, which was not achieved in reality.
In addition, the war on the Gaza Strip and its repercussions in the Red Sea negatively affected the canal’s revenues during the month of January by about 40%.
Regarding the state’s general budget, the document aimed to “apply the principle of unity and comprehensiveness of the budget,” and at the same time this document aims to establish several funds for different purposes, in addition to what has been established over the past 10 years by a group of private funds, most notably the “Long Live Egypt” Fund and the Egypt Fund. Sovereign, the question remains: Will these funds be included in the general budget during the coming period?
It is noteworthy that the Egyptian government issued in 2016 its vision for the year 2023, and it included, in terms of content, much of what was stated in the document on the strategic directions of the Egyptian economy, and the general plan for social and economic development for each year in Egypt also includes important axes included in the document, but despite all this, it is not felt The citizen has a positive impact on his daily life.