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Egypt Overview

    Context

    POLITICAL CYCLE

    Abdel Fattah El-Sisi was sworn into office as president on June 8, 2014. Prior to this post, El-Sisi was head of the Egyptian Armed Forces and First Deputy Prime Minister and Minister of Defense in previous governments. Presidential elections were the second of a three step transition. The first phase was voting on a new constitution which happened in early 2014. Step three of the transition, parliamentary elections, is expected to be completed in 2015.

    CONTEXT

    In January 2011, Egypt erupted in large-scale anti-regime demonstrations, resulting in the resignation of President Mubarak and the collapse of the regime that had been in power for 30 years. On June 30 2012, Dr. Mohamed Morsi, the candidate of the Freedom and Justice Party was elected as Egypt’s fifth president and the first from outside the military. On August 12, 2012, President Morsi nullified a declaration issued by the military effectively assuming broad executive and legislative powers. Political tensions mounted starting in June 2013 with demonstrations against President Morsi in the lead up to the first anniversary of his presidency. President Morsi was removed and interim President Adly Mansour was sworn in on July 4, 2013. Presidential elections were held on June 8, 2014, and Abdel Fattah El-Sisi was confirmed with almost 97% of the votes. Parliamentary elections are planned to be held in 2015.

    On July 5, 2014, President El-Sisi announced a wide range of reforms, introducing new taxes, increasing selected taxes, and reducing energy subsidies. Reforms are starting to have a positive impact on the economy. Economic growth in Fiscal Year (FY) 14 of 2.2% is projected to almost double to 4% in FY15.  The budget deficit is expected to decline to 11.3% of GDP in FY15, compared to 12.8% in FY14, and 14% in FY13. This will bring down government debt to GDP ratio to 94% by end FY15, from 95.5% in end-FY14. Egypt has been benefiting from large-scale exceptional financing from the Gulf. Saudi Arabia, United Arab Emirates, and Kuwait have committed around US$20 billion to Egypt through a mix of central bank deposits, cash and in-kind grants, and project aid. On March 13-15, 2015, during the Egypt Economic Development Conference (EEDC), the Government highlighted its economic reform program designed to restore fiscal stability and drive growth, and attract domestic and international investors across key sectors. The World Bank Group (WBG) will engage with Egypt on the reform agenda.

    Last Updated: Mar 01, 2015

    LENDING
    Egypt: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    The most recent World Bank Group strategy was the Interim Strategy Note (ISN), prepared in 2011 in a context of political and economic instability in Egypt and covering an indicative program of support from June 2012 through December 2013.  The ISN followed an earlier Bank-International Finance Corporation (IFC) joint Country Assistance Strategy (CAS) for the period FY06-09, which was extended through FY11.

    The WBG team is preparing a Country Partnership Framework (CPF) jointly with IFC and MIGA, drawing on the constraints identified in a recently completed Systematic Country Diagnostic (SCD) to lay the foundation for future WBG engagement for FY15-19. The strategy process was launched on March 5, 2014 with the government and, starting in June 2014, two rounds of face-to-face consultations were held in Cairo, Alexandria and in Aswan with civil society, youth, academia, the private sector, and the donor community in addition to a round of online consultations. The CPF is consistent with the priorities identified in the consultations and with the short-to-medium-term strategy articulated both by the transitional government in 2013 and the 2014 elected government.

    The CPF focuses on key drivers for achieving the twin goals of enhancing shared prosperity and reducing extreme poverty: (i) private sector job creation and spatial integration; and (ii) service delivery, especially to the poor, and social protection. This includes supporting economic stability and improved governance and creating opportunities for sustained income generation by promoting private sector policies to level the playing field, investing in transport infrastructure, enhancing agricultural productivity and creating off-farm opportunities. Support to improve service delivery to the poor and social protection focuses on ensuring equitable opportunities by enhancing delivery of education, health and targeted social safety nets. Those opportunities also have to be sustainable with a focus on air pollution, water and sanitation, renewable and energy efficiency and solid waste management.  In pursuit of more accountability, and consistent with the Bank Group’s approach used in Egypt in the recent past, all initiatives under the CPF will systematically include voice and participation.

    Egypt is eligible for lending from the International Bank for Reconstruction and Development (IBRD). As of March 12, 2015, the active WBG portfolio consisted of 17 IBRD projects, 4 GEF operations, and 5 recipient executed trust funds for a total commitment of about US$ 5.4 billion. 

    Last Updated: Mar 15, 2015

    LENDING
    Egypt: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    Access to Finance for Micro and Small Enterprises Project: More than 75,000 loans have been disbursed to Medium and Small Enterprises (MSEs), leading to the creation of over 100,000 job opportunities. Importantly youth, suffering disproportionately high unemployment rates, have been effectively targeted, with beneficiaries between the ages of 21 to 35 representing 60% of all microfinance lending. There was also an increase in the number of female-owned MSEs from 4,573 to 20,536 from June 2012 to June 2013 as a result of the project.

    Labor Intensive Public Works Program: The project reached more than 3,000 beneficiaries of which 67% were female, 80% came from Upper Egypt, and 82% were youth. Furthermore, in order to expand social protection for the most vulnerable, a World Bank multi-sector team provided technical advice to the government on subsidy reform and cash transfers and supported the establishment of an inter-ministerial technical working group to design a cash transfer program.

    Energy projects: The Bank made substantial progress in expanding generation capacity. 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. The Natural Gas Connections Project has successfully financed gas connection to more than 365,637 households representing 15% of connected households in Cairo and Giza governorates. The project has connected more than 90,000 low income households to the gas distribution network and created more than 3,000 jobs, mainly in network installation and maintenance

    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: Mar 15, 2015

    LENDING
    Egypt: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
Country Office Contacts
Cairo, +20-2-2-574-1670/71

World Trade Center, 1191 Corniche El-Nil, Boulaq, Cairo, Egypt

ewahby@worldbank.org
Washington DC