Egypt, a lower middle income country, is due to complete its political transition: a new constitution was adopted by popular referendum and presidential elections were held in May 2014. Parliamentary elections were completed in December 2015. 

GNI per capita is estimated to be around $3,340 in 2014/15. Official data indicate that 28 percent of the population lived below the poverty line in 2015, with poverty rates as high as 60 percent in rural Upper Egypt.  There have been significant improvements in human development indicators over the last three decades. Nevertheless, large spatial disparities exist in terms of education and health outcomes.  

Unemployment at 12.5 percent in mid-2016 (up from 9 percent prior to 2011) is a particular concern, with higher rates among the youth and women.  Furthermore, recent increases in the population growth rate, is placing additional pressure on infrastructure and services. This is creating additional impetus for reforms to generate economic growth and to respond to the needs of the population and their expectations of improvements in well-being.

The economy is gradually improving with annual rates of GDP growth reaching 4 percent in 2014/15 and 2015/16, up from an average of only 2 percent during the period 2010/11-2013/14. Responding to large fiscal imbalances, the government has introduced a bold fiscal consolidation program. The program includes measures to increase tax revenues, control the civil servants’ wage bill, shift spending from commodity subsidies to targeted cash transfer programs as well as undertake much needed infrastructure investments.

However, macro imbalances persist. Despite efforts to correct exchange rate misalignments, there is still a parallel exchange rate (which emerged in 2013).  International reserves are low.  In addition to the foreign exchange crunch, Egypt’s investment climate and unfavorable external conditions—such as the sluggish economic recovery in Europe, and lower international oil prices that have impacted Egyptians remittances from the Gulf—add to the economic challenges.

Last Updated: Oct 01, 2016

The new Country Partnership Framework (CPF) for Egypt was approved on December 17, 2015. Prepared jointly by IBRD, IFC and MIGA, informed by consultations with a broad range of stakeholders, and underpinned by a Systematic Country Diagnostic, the CPF will guide WBG engagement in Egypt during the period FY15-FY19.  Scaling up support for the country in a critical period of economic and social transformation, it will focus on Egypt’s urgent need to create more jobs, especially for the youth, improve quality and inclusiveness in service delivery, and promote more effective protection of the poor and the vulnerable. Under the WBG twin goals of ending extreme poverty and promoting shared prosperity, the CPF is structured around three interconnected focus areas: (1) improving governance; (ii) enhancing private sector job creation; and (iii) improving social inclusion.

This CPF presents an important departure from previous WBG strategies for Egypt. The CPF supports a transformative program to renew the social contract to support private sector job creation, social inclusion, and enhanced governance. The Bank intends to use a programmatic approach, including finance and knowledge, use analytic products strategically to underpin policy dialogue and project design, and deploy the WBG’s convening power to promote advocacy and reforms. Lending will rely more on development policy financing (DPF) and Program for Results (PforR) s than in the past where the main instrument was investment loans, although investment loans will continue to be used where appropriate. Governance issues will be an integral part of all Bank Group initiatives, including policy and institutional reforms, and increasing transparency and accountability at the sector and project level; this will include enhancing citizens’ voice and grievance redress mechanisms.  The WBG will show greater selectivity in the use of IBRD resources in core public sectors, with IFC leveraging the private sector.  The Bank and IFC will use a joint approach in energy, education, and competitiveness.   
Egypt’s First Fiscal Consolidation, Sustainable Energy, and Competitiveness Programmatic DPF (Development Policy Financing) was approved by the World Bank Board on December 17, 2015. The Program will contribute to renewing the social contract and supporting economic recovery. The Program Development Objectives are to advance fiscal consolidation through higher revenue collection, greater moderation of the wage bill growth, and stronger debt management; ensure sustainable energy supply through private sector engagement; and enhance the business environment through investment laws and industrial license requirements as well as by enhancing competition.

Last Updated: Oct 01, 2016

Access to Finance for Micro and Small Enterprises:

Channeled through the Social Fund for Development (SFD) and on-lent to eligible financial intermediaries, the lines of credit have reached more than 143,562 beneficiaries, 38% of which are women, and 40% are youth. This led to the creation of 261,938 job opportunities by the end of June, 2016. In addition to a special focus on youth and women, as well as underserved regions, innovative financing mechanisms are being promoted, including venture capital mechanisms.
Labor Intensive Public Works Program:

The projects have reached more than 137,000 beneficiaries, of which 51% are female, and 81% are youth. A multi-sector team provided technical advice to the government on subsidy reform and cash transfers and supported the design a targeted cash transfer program.

Strengthening Social Safety Net Project

The project has helped launch the cash transfer programs Takaful and Karama in April 2015 in Egypt’s most lagging regions. So far, more than 720,000 households have applied/registered to the program and more than 506,000 beneficiary eligible households have received cash payments.
Energy projects:

The fast track power generation program (2,100MW) was one of the main drivers for bringing installed capacity to a total of 29,000 MW. From FY06 to FY13, the World Bank supported four gas-fired generation plants (El Tebbin, Ain Sokhna, Giza North and Helwan South) and supported a program of renewables. A natural gas project has connected more than 365,637 households representing 15% of connected households in Cairo and Giza governorates. More than 90,000 low income households have been connected to the gas distribution network and more than 3,000 jobs were created, mainly in network installation and maintenance.

Water, Sanitation and Irrigation:

Improved irrigation and drainage services were provided to over 300,000 farmers. 1,465 water user associations (WUAs) were established and Egypt’s first waste water PPP was successfully completed in cooperation with IFC. The bank has also been supporting the Sanitation sector through the Integrated Sanitation and Sewerage Infrastructure Project which closed in December 2015 benefiting 13,300 households. The Bank is currently implementing the Second Integrated Sanitation and Sewerage Infrastructure Project which targets to benefit 55,000 households. Moreover, a large Program has been recently approved to increase access to improved sanitation services in Egypt’s rural communities. 167,000 households within the Delta are expected to be connected by 2020.

Investment support:

The Multilateral Investment Guarantee Agency reinsured the United States Overseas Private Investment Corporation’s coverage of Apache Corporation’s investments in its subsidiaries in Egypt.

Last Updated: Oct 01, 2016


Egypt: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments