Egypt: opportunities exceed risks

Sound public finances, public works and a commitment to renewables underline the economic modernisation of the African country, host of the United Nations Climate Change Conference.

After two years of pandemics that have impacted key sectors of the economy and despite the aftermath of the war in Ukraine, Egypt's economy continued to grow and enjoys the unwavering support of the IMF, the EU and the Gulf countries. 

The land of the pharaohs is too big to fail and too full of ancient history to fall into irrelevance. And situated at the crossroads of the Mediterranean, Africa and the Middle East, it is as attractive as it is populous.

With the potential talent of 100 million people clinging to the Nile River, Egypt is a nation of weight with a prominent place in the cultural, political and religious mind throughout the region. 

It is also actively positioning itself as part of the Silk Road, with trade links spanning centuries and a strong interest in trade routes through the Suez Canal. This canal has served the world for more than 160 years and is a major source of revenue, some $5 billion annually.

The tide is turning, with more tourists returning, private companies working on a more secure basis and a structural reform programme underway. 

Egypt needs to adopt policies that strengthen the private sector, especially SMEs, and promote employment growth in order to consolidate the economic recovery effort for further growth. Improvements in financial indicators by maintaining the downward trend in the budget deficit and debt as a percentage of GDP are key to boosting the business environment.

The private sector is the main engine of growth and job creation due to its dynamism and added almost one million jobs. It is also necessary to attract investments and have export improvements. Project contracts are being awarded in the construction and transport sectors with values that have increased over the last few years. 

This November, Egypt hosted the United Nations Climate Change Conference, COP27, offering an opportunity to play a leading role in the ongoing talks and showcasing the country's own energy transition milestones and challenges.

Egypt's government is working on a hydrogen strategy with an investment of €40 billion, a project that includes the delivery of 1,400 MW of capacity by 2030, making it a key potential player in low-carbon fuels. 

Egypt's impressive transition from a chronic energy deficit to a substantial surplus is a path that other countries in the region can follow.

In addition to being one of Africa's largest economies, it can become the gateway to the continent. In Egypt, the economic opportunities available outweigh the risks.