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Chronicle of the Middle East and North Africa

Economy of Egypt

Labourers rest and have a meal inside a concrete tube
Labourers rest and have a meal inside a concrete tube as they take cover from the sun at a construction site at Egypt’s “New Administrative Capital” megaproject, some 45 kilometres east of Cairo, on August 3, 2021. (Photo by Khaled DESOUKI / AFP)

Introduction

Egypt lies on the northeast corner of the African continent, where most of the economic activity takes place; Egypt hosts the highly fertile Nile Valley, another reason for strong economic activity. The Egyptian economy was highly centralized under former President Gamal Abdel Nasser, but it fully opened under former Presidents Anwar Sadat and Mohamed Hosni Mubarak. Agriculture, hydrocarbons, manufacturing, tourism, and other service sectors have led to relatively diverse economic activity.

Egypt’s mixed record of attracting foreign investment over the past two decades, poor living conditions and limited employment opportunities contributed to public resentment. These social and economic pressures led to a civil uprising in January 2011 that toppled President Mubarak. The unstable political, security, and political environment since 2011 has restricted economic growth and failed to alleviate persistent unemployment, especially among young people.

In late 2016, the continuing depreciation of the US dollar and the decline in assistance from Gulf allies led to the use of the International Monetary Fund (IMF) for a three-year loan of $12 billion. Cairo floated its currency to secure the deal, it introduced new taxes and reduced energy subsidies – all pushing inflation above 30% for most of 2017. Before the floating decision of the third of November 2016, the dollar’s exchange rate against the Egyptian pound was 8.85 pounds per dollar, but with the floating decision, the Central Bank of Egypt put the rate at 13.52 pounds. However, the United States currency continued to make record jumps to its highest rate against the Egyptian pound in the second half of 2017, when the dollar’s exchange rate jumped to about 19.60 pounds, recording record levels in the Egyptian exchange market, rising by approximately 121.46%.

The depreciation of the US dollar began at the end of 2017, with the dollar losing about 4 pounds of value until the last quarter of 2021 after its exchange rate hovered to about 15.6 pounds, a decline of about 20%, in nearly three years. Macroeconomic conditions have improved as Egypt’s double deficit has shrunk and inflation has declined sharply.

The central bank had cut key interest rates for the first time since the tightening cycle that accompanied the exchange rate hike in November 2016. Economic activity began to recover, and the unemployment rate fell below 12% for the first time since 2011.

The growth rate of the Egyptian economy was 5.2% in the first half of the fiscal year of 2018 (1st of July to the 30th of June), compared to 3.7% in the previous fiscal year, according to World Bank reports, driven mainly by investment, exports, and consumption. The extractive gas industry sector had been a significant contributor to growth, particularly since the actual operation of the large “back” gas field in mid-December 2018. Improvements in energy supply are beginning to affect other sectors positively, particularly the manufacturing industry. The tourism sector is also gradually recovering, helped by the impact of the devaluation of the local currency.

The emerging economic recovery was accompanied by a steady decline in the unemployment rate, which fell to its lowest level since the middle of the fiscal year 2010/2011 (1st of July to the 30th of June), to 9.8% in the fiscal year 2018/2019, before rising again by 0.3% in the following fiscal year 2019/2020.

The reform measures taken with IMF support have been harsh – but necessary – for the economy’s health on the way forward. Steps taken to improve the regulatory framework and reduce bureaucratic inefficiency have also been essential and will remain a priority. This is because improving the ease of doing business creates jobs and allows families to improve their lives, and their children’s lives.

Financial action has strengthened the Government’s financial position and enabled it to manage the effects of the new Corona epidemic. According to IMF reports, the Covid-19 pandemic was a massive shock to the Egyptian economy, as in most rising markets. Its repercussions were quickly reversed by the sudden cessation of tourism. At the beginning of the crisis, it contributed about 12% of GDP, providing about 10% of employment and 4% of GDP in foreign currencies. Preventive measures to contain and prevent the spread of HIV, including partial public closures and restrictions on the absorptive capacity of public places have led to a temporary decline in local activities.

In contrast, the Government’s budget has come under pressure because the slowdown in economic activity has resulted in lower tax revenues. Egypt also experienced large capital inflows of over $15 billion during March-April 2020, as investors pulled out of rising markets for safer investments. However, Egypt was one of the few emerging market countries to achieve a positive growth rate in 2020 thanks to a timely response from the Government and the support of the International Monetary Fund (IMF). The Egyptian economy showed resilience in the face of the pandemic, despite the short period of general closure and a relatively diverse Egyptian economy.

Gross Domestic Product of Egypt

Despite ambitious measures to regulate public finances, the re-emergence of COVID-19 cases has cast a shadow over this nascent economic recovery in Egypt. According to the World Bank, these pressures are due to foreign income sources that have been severely affected (tourism, commodity exports, and foreign direct investment). Yet remittances, inflows of investment portfolios, and external financing still support international reserves.

The real growth rate decreased from 5.6% in the fiscal year 2018/2019 to 3.6% in 2019/2020, with the Coronavirus crisis causing an annual contraction of 1.7% between April and June (fourth quarter 2019/2020). Growth rose in July to September and October to December (the first quarter and the second quarter of the fiscal year 2020/2021), with the lifting of the night curfew and the easing of social divergence procedures. However, it remained low at 0.7% and 2% respectively. Unemployment had fallen to 7.2% by the second quarter of the fiscal year 2020/2021 (After a rapid rise of 9.6% months ago). The initial decline in total employment was reversed as a result of the reemergence of Covid-19 cases across the country.

According to the World Bank, labor-force participation and engagement rates recovered from the significant initial reduction; However, they remained below potential at 43.5% and 40.4% of the working-age population in important sectors, such as tourism and industrialization.

Preliminary results indicated that Egypt’s GDP grew by 3.3% during the 2020/2021 fiscal year. (July 1 to June 30) Supported by results achieved and a growing trend in quarterly growth rates during the fiscal year, which rose from 0.7% in the first quarter to 2% in the second quarter and 2.9% in the third quarter, despite significant challenges faced by the Egyptian economy during the previous fiscal year due to the fallout of the Corona pandemic. GDP growth in the fourth quarter of the fiscal year 2020/2021 jumped to about 7.7% compared to about -1.7% in the same period in the previous fiscal year 2019/2020 (April-June).

The Coronavirus Pandemic Affected annual GDP growth rates, with economic growth falling during the 2019/2020 fiscal year to 3.6%, compared to 5.6% achieved during 2018/2019.

However, the negative consequences of the pandemic undermined recent progress and highlighted long-standing challenges. Some of the aforementioned challenges include: the slowdown in non-oil activity of the private sector, the weak performance of exports and foreign direct investment, the high ratio of government debt to gross domestic product, the low rates of revenue mobilization below the hoped-for level, the inadequate structure of the State budget for the nature of the crisis, and the lack of allocations to the health and education sectors.

Macroeconomic reforms in Egypt had helped stabilize the economy in recent years and had allowed the country to enter the Covid-19 pandemic crisis with improved public treasury accounts and a relatively high level of foreign reserves. Energy sector reforms have helped boost electricity supply and gas exports, opening up the energy market to private sector activity, particularly renewable energy. This has enabled avoiding falling into the trap of economic deflation.

The World Bank recommended that Egypt advance macroeconomic and public finance reform as well as structural reforms, strengthen social protection, advance the human capital agenda, and implement measures to contain the pandemic to achieve a solid economic recovery.

GDP(Calendar year)

Indicatorsmeasuring unit20192020Change ±
GDP (at constant 2010)Billion US$302.18312.9710.79
GDP growth (annual)%5.563.57-1.99
GDP per capita (constant 2010)US$3,010.23,058.348.1
GDP (at current value)Billion US$303.08363.0760.00

Industry

As part of an ongoing effort by the industrial sector to support the Egyptian industrial base and push the Egyptian industrial product into a suitable position in foreign markets, production capacity in the number of primary industries has increased by 25% since the mid-1990s, until the uprising in January 2011.

Egypt’s industrial structure is based on seven industries, comprising more than 80% of industrial enterprises. The three most extensive industrial activities are concentrated in the textile, food, beverage, and furniture industries, followed by mining, chemical, and bare metal industries.

According to the Ministry of Trade and Industry, Egypt had 93 cities and industrial zones by the end of 2020. The cumulative number of installations in these cities and regions was 10,621. Fifteen industrial zones contributed 82.83% of the total number of enterprises operating in towns and industrial areas. The city of 6 October is ranked first with 2,021 facilities, with a relative importance of 19.03% of the cumulative total number of facilities, followed by the industrial transit city (2,007 establishments), the ten cities of Ramadan (1,509 establishments), New Cairo (640 establishments), Badr (518 establishments), with a relative importance of 18.90%, 14.21%, 6.03%, and 4.88% respectively.

Regarding the country’s manufacturing trends, the total number of manufacturing enterprises fell by 19.59% to 6,948 (operating in 423 industries) during 2020, compared to 8,641 (operating 472 sectors) in 2019. In terms of relative importance, the total number of highest working enterprises in 15 manufacturing industries was 2,080, representing 29.94% of the total number of manufacturing enterprises in 2020.

The total value of investment costs for manufacturing enterprises increased by 77.64% to 240.208 billion Egyptian pounds (approximately US $15.40 billion) in 2020, compared to 135.233 billion pounds ($8.67 billion) in 2019. The total investment costs of the 15 most essential manufacturing industries amounted to 131.535 billion pounds (approximately $8.43 billion), representing 54.67% of the total investment costs of manufacturing enterprises during 2020.

The development of manufacturing industries in Egypt during the year 2020 compared to 2019:

rankingIndustryNumber of establishments per yeargrowth rate (%)
20192020
1Various clothes of fabrics23742880.59
2Plastic rolls, bags, packages and boxes235197-16.17
3Food packaging329187-43.16
4wooden furniture266138-48.12
5medical clothes27126366.67
6Distribution and control switches and electrical panels7612463.16
7Various plastic products132119-9.85
8Various textiles7710738.96
9Various shoes48104116.67
10Metal parts for various industries13998-29.50
11soap499491.84
12popular bread36491-75.00
13Working, cutting, polishing, shaping natural stones11190-18.92
14Wooden doors and windows16089-44.38
15blacksmithing13888-36.23
16Other6,2534,868-22.15
Total8,6416,948-19.59

Source: Ministry of Trade and Industry.

Despite the challenges faced as a result of the Covid-19 pandemic, the industrial sector achieved positive performance indicators during the 2019/2020 fiscal year, with an industrial growth rate of 6.3%; Industrial output accounted for about 17.1% of GDP. The country’s industrial sector accounts for 28.2% of total Egyptian employment.

Keeping this in mind, it is important to recognize the importance of the industrial sector to the economic growth of Egypt, as it acts as the countries engine. The promotion of the national industrial sector has become a strategic approach of the state and a high priority in sustainable economic development plans. However, the industrial sector represents the locomotive of economic growth in Egypt.

Work has been done to develop an integrated systematic plan and implement several initiatives to upgrade and modernize this sector and deepen local industrialization through expanding the establishment of industrial complexes, providing production requirements and exceptional facilities to encourage investment. It has intertwined relations with many productions and service sectors and improved the competitiveness of the Egyptian product in the domestic and international markets. The manufacturing industry was reported to have achieved a positive growth rate during the 2019/2020 fiscal year of about 1.4%. However, less than in its previous fiscal year of 2.8%, but remained positive in the year of the pandemic.

Industry indicators (Financial year)

Indicatorsmeasuring unit2018/20192020/2019Change ±
value of industrial productionBillion dollar54.3060.406.1
Industry contribution to GDP%16.4017.100.7
Employment in industry (of total employment)%28.2%28.2%

Source: Ministry of Industry and Trade.

Agriculture and Livestock

Agriculture:

The statistical data estimated 224,000 acres of 1 reclamation in the fiscal year 2019/2020, compared to 110,000 acres in 2018/2019, due to the state’s trend of increasing reclaimed land. The land reclaimed by farming companies was 38.3 thousand acres in 2019/2020, while in the corresponding fiscal year 2018/2019, it was 30.7 thousand acres, an increase of 24.9%.

According to the Republic-wide provinces, the total amount of reclaimable land in the fiscal year 2019/2020 is approximately 223,000 and 768 acres.

According to the Restoration and Relative Distribution Authorities, in 2019/2020, the distribution of reclaimed lands indicates that private sector companies have acquired the lion’s share of the total area by 77,000 acres and 334 acres, for 95.4% of the entire region. They were followed by the General Authority for Agricultural Reconstruction and Development Projects (PAAAD), which acquired 2.5% acres, and cooperative societies with about 1750 acres at a rate of 2.1%.

An estimated 4 million acres of land was reclaimed for agricultural development between 2014 and 2021, including:
the 1.5 million-acre project and the 100,000-shell project costing 40 billion pounds (approximately $2.6 billion) in 2017 southeast regions of Egypt.

– The cultivation of world-class palm.

– A giant project east of Al-Awaynat on 40,000 acres.
 -The Future of Egypt Agricultural Production project along the hyena road in the northwest direction is among the most important agricultural projects launched by the state to maximize productive opportunities in land reclamation and agricultural production.

These and other projects in the Tuški, Sinai, and South Valley regions constitute a significant addition to the agricultural area, accounting for about 15% of the rural area eroded by construction on agricultural land.

It is reported that 30,000 acres were reclaimed in 2018/2019, and 120,000 acres were added in 2019/2020 as part of the Future of Egypt project, bringing the area to 150,000 acres.

The total area under cultivation for each of the three bays and fruit gardens in 2018/2019 was 16.2 million acres, compared to 16.0 million acres in 2017/2018, an increase of 0.2%.

The land under cultivation with temporary or sustainable crops without replicating the items of the crop is grown more than once throughout the year. In addition to durable agriculture (fruit gardens, balm palms, pilgrims, wooden trees) amounted to 9.1 million acres in the 2016/2017 season, 9 million acres in the 2017/2018 season, and 3 million acres in the 2018 season.

The first was the Lake Governorate, with 1 million and 400,000 acres, followed by the Eastern District, with 900,000 acres, and the Sheikh Kafr 800,000 acres, with 700,000 and 500,000 acres. The area of reclaimed land, new and old, was estimated at 290,000 acres; The total harvested area is 16 million and 400,000 acres, which is the area of farmed land with both field yields, three-bare vegetables, and fruit gardens.

According to World Bank data, value-added in agriculture rose from $33.49 billion in 2019 to $41.78 billion in 2020, accounting for 11.51% of GDP in 2020, compared to 11.05% in 2019, an increase of 0.46%.

Agricultural exports rose to more than 4.4 million tons between January 1, 2021, and August.

The most important agricultural exports include citrus, potatoes, onions, strawberries, pomegranates, sweet potatoes, beans, fodder penguins, guava, peppers, mangoes, garlic, grapes, and melons.

Despite the circumstances of the Covid-19 pandemic and the confusion of international transport and trade, Egyptian agricultural exports in 2020 amounted to approximately 5.07 million tons or 2.1 billion United States dollars, the main ones being citrus, potatoes, pomegranates, and grapes; This is unlike exports of manufactured and packaged agricultural products. The country’s exports of farm products in 2019 were 5.4 million tons of citrus, which came in the first place, up from about 1 million, 772 thousand and 281 tons, as well as 687 thousand and 842 tons of potatoes exported to take second place in agricultural exports after citrus, 602 thousand and 16 tons of onion were exported, third place in exports, fourth place in agricultural exports with a total of 120 pomegranates.

According to World Bank data, in 2019, 20.62% of the total labor force was employed in agriculture, down from 1.04% in 2018.

Agricultural Indicators (Financial year)

Indicatorsmeasuring unit2017/20182018/2019Change ±
Cultivated land areamillion acres9.19.30.2
Crop area for agricultural cropsmillion acres16.116.20.1
Crop area of wheatmillion acres3.23.1-0.1
wheat productionmillion tons8.38.60.3
Rice cropping areamillion acres0.91.30.4
rice productionmillion tons3.14.81.7
Cotton crop areathousand acres336239-97
Consumer of cotton locallyA thousand metric quintals28.836.37.5
cotton exportsA thousand metric quintals86.2190.4104.2
total agricultural exportsmillion tons4.14.30.2
Ratio of people employed in agriculture to the total labor force%21.6620.62-1.04

Livestock

The Egyptian Ministry of Agriculture estimates the size of Egypt’s livestock in early 2021 to be 6.5 million head of livestock and live animals.

The field livestock inventory exclusively in all governorates of the Republic has shown records of 3.8 million head of cattle from local cows, local buffalo, and imported cows, with 2.3 million head of cattle among local cows, 1.3 million head of buffalo, and 200,000 head of cows imported. With an additional 2.7 million heads of sheep, goats, and camels.

The proportion of meat self-sufficiency rose from 44% in 2014 to 57% in 2020, and the state aims to reach over 65% in 2025.

Foreign Trade

According to the report of the Central Bank of Egypt, during the fiscal year 2019/2020, Egyptian economic transactions with the outside world had a deficit in the trade balance of $36.5 billion, about $1.5 billion below the level of the debt produced during the fiscal year 2018/2019. However, transactions with the outside world registered a total deficit in the balance of about $8.6 billion payments. The current account was experiencing near-stabilization in the deficit during the 2019/2020 fiscal year. The second half saw the negative fallout from the Covid-19 pandemic reach about $11.2 million, a slight increase from the level of deficit achieved during the 2018/2019 fiscal year of about $10.9 million.

However, the marked improvement in the GER trade balance and the rise in pro bono hedges have contributed to easing the shock on the Egyptian economy.

On the financial side, the impact of the global pandemic has been strongly reflected in the behavior and movements of capital around the world, leading to massive financial inflows from global financial markets. Nevertheless, the capital and financial account of the Egyptian payments budget maintained a net inflow of some $5.4 billion, which helped to reduce the overall deficit by the payment budget.

The fiscal year 2019/2020 saw petroleum export earnings decline by 26.6% from $11.6 billion in the year 2018/19, to just $8.5 billion. Non-petroleum export earnings increased by 5.7%, to about $17.9 billion. According to the Central Bank report, this is mainly due to the increase in export earnings from the semi-manufactured group of goods by 43.3%, raw materials by 12.9%, and finished goods by 7.5%.

The largest share of export earnings in 2019/2020 was held by the private sector at 68.9%, the public sector at 16.8%, and the investment sector at 14.3%.

In contrast, payments for commodity imports decreased by 5.5% to about $62.8 billion. Both petroleum imports fell by about $2.6 billion, to about $8.9 billion, and imports by GER by about $1.0 billion, to about $53.9 billion.

In July 2021, Egypt’s trade balance fell to a deficit of $2.9 billion, compared to a shortage of $2.9 billion in the previous month.

Total Egyptian exports recorded $2.7 billion in February 2021, an increase of 31.4% on an annual basis; Total imports reached $6.1 billion in March 2021, an increase of 31.4% every year.

Foreign Trade (Financial year)

Indicators2018/20192019/2020Change ±
Merchandise exports (billion dollars)28.49526.376-2.119
Merchandise imports (billion dollars)66.52962.841-3.688
Trade deficit (billion dollars)38.03436.455-1.579
Coverage ratio of merchandise exports to merchandise imports (%)42.842.0-0.8
Trade Balance Deficit to Present Value of GDP (%)12.610.1-2.5

Source: Central Bank of Egypt.

Poverty

According to a statement by the minister of planning Hala Al-Sayed on the results of income, expenditure, and consumption research, the poverty rate in Egypt fell to 29.7% in the fiscal year 2019/2020, compared to 32.5% in 2017/2018. The rate of extreme poverty fell to 4.5% compared to 6.2% in 2017/2018.

The Central Bureau of Public Mobilization and Statistics set the poverty line in the new census at £857 per month (approximately $55), compared to £736 per month (roughly $47.2) in 2018/2017, while the proportion of extreme poverty among citizens fell from 6.2% to 4.5% over the past two years. The government considers these ratios to result from the success of the economic reform program that the Egyptian government had pursued since the Egyptian fairy float in November 2016.

The unemployment rate in Egypt fell to 7.2% in the second quarter of the fiscal year 2020/2021 after jumping to 9.6% in the fourth quarter of the fiscal year 2019/2020. The initial decline in total employment was reversed at the beginning of the Corona crisis. The labor force participation rate and the employment rate recovered from their substantial initial fall but remained below their possible levels at 43.5% and 40% of the population in the age group.

The average annual household income rose by 15% to record 69.1 thousand pounds (approximately US $4,430) during the 2019/2020 fiscal year, compared to 58.85 thousand pounds in the 2017/2018 fiscal year.
The average household income in rural areas increased by 13.3%, while the urban ratio jumped by 16.3%. According to the Stock Exchange, the Lithe Endowment is the Central Bureau of Public Mobilization and Statistics adviser.

New Administrative Capital Project of Egypt

The New Capital Administrative Project aims to move the capital to create numerous housing and employment opportunities to address Egypt’s various issues, a large-scale project announced by the Egyptian government at the Conference in Support and Development of the Egyptian Economy on March 13, 2015. The new capital lies between the Greater Cairo Province and the Suez Canal Province near the regional ring road and the Cairo/Suez Road; The region is planned to be the seat of Parliament, the Presidency, key ministries, and foreign embassies. The project also includes a significant park and an international airport. The city’s total area is 170 acres, the estimated population after the city’s growth is 6.5 million, and the employment opportunities generated are approximately 2 million.

The official spokesman for the Administrative Capital for Urban Development announced in September 2021 that the implementation rate of the first phase is 70%. The first phase is located on 40,000 acres. It includes ten residential neighborhoods, the government district, the parliament, the administrative district, the opera site in the City of Culture and Arts, the business and banking district, the international airport, residential neighborhoods, roads and bridges, the power station, water stations in the Administrative Capital project, Al-Fattah Al-Alim Mosque, and the Cathedral of the Nativity of Christ, which were opened in early 2019.

Basic Indicators: (Financial year)

Indicators2018/20192019/2020Change ±
Total Public Revenue (Billion Dollars)60.7762.932.16
Total Public Expenditure (Billion Dollars)88.6292.564.17
Public budget deficit (billion dollars)27.5729.632.06
Public budget deficit to GDP ratio (%)8.27.9-0.3
Public debt to GDP ratio (%)80.581.51
Financial year1July  – 30 June 
20192020
Inflation rate(%)6.55.1

Source: Ministry of Finance, Central Bank.

Tourism Sector of Egypt

Tourism witnessed several crises between 2011 and 2017, which began with the outbreak of the 25th January revolution and the subsequent events that affected the security situation and economic performance. These led to a 34.7 per cent drop in tourist numbers and a 47.9 per cent decrease in tourism revenues in the 2014/2015 fiscal year.

Several terrorist incidents in Sinai resulted in losses of more than $1.5 billion in 2016. In addition, the bombing of a cathedral in December 2018 led to the cancellation of about 40 per cent of hotel reservations in Cairo over Christmas from Arab countries, especially the United Arab Emirates and Kuwait, as well as several East Asian and European countries.

Official statistics showed that tourist arrivals in July 2016 fell by 41.9 per cent compared to the same month in 2015. Tourist companies experienced a 20 per cent drop in reservations in 2016 and have seen a staggering 75 per cent drop overall since 2011.

Russian visits to Egypt dropped by 60 per cent, British visits by 17.5 per cent and German visits by 10.4 per cent in 2017. However, Hurghada began receiving many foreign visitors who stopped travelling to Sinai. The tourism crisis forced hotel and tourist establishments to lay off 720,000 workers out of a total of 800,000 workers (90 per cent) in 2016 and 2017.

Tourism revenues reached only $500 million in the first quarter of 2016, a 66 per cent decrease compared to 2015, due to Russia’s withdrawal from the tourism market, which accounts for more than 40 per cent of the incoming tourism volume to Egypt, according to the State Information Service website.

By the fourth quarter of the 2016/2017 fiscal year, tourism revenues had risen to $1.5 billion, according to a Bloomberg report based on CBE data. Despite the recovery of the sector, revenues are still far below the $11.6 billion generated in the 2009/2010 fiscal year.

According to the Federation of Tourist Chambers, 100,000 Russian tourists visited Egypt in 2017, although there are no direct flights between Moscow and Cairo.

A recent study on the development of tourism traffic to Egypt indicated that the tourism sector achieved strong growth during 2018 compared to the years following the 2011 revolution. Preliminary data showed that the number of tourists increased by 40 per cent in 2018, reaching around 11.6 million compared to 8.3 million in 2017.

According to CAPMAS, Europeans accounted for 56.3 per cent of the total number of tourists in 2017, whereas Arab tourists accounted for 29.7 per cent, Americans 4.3 per cent and other nationalities 9.6 per cent.

The number of hotels and resorts declined from 1,057 in 2015 to 1,031 in 2016, whereas the number of floating hotels increased from 51 in 2015 to 54 in 2016.

Banking Sector

About 40 government and private banks operate in Egypt, most with foreign capital, including 3 Islamic banks. Egypt’s largest bank is the Egyptian National Bank, with over $48 billion in assets, the Bank of Egypt with $27 billion in assets, and the World Trade Bank, the third-largest bank in Egypt with an estimated $13.5 billion in assets.

The Private Bank of Egypt, the Bank of Egypt, and the Bank of Cairo are major banks that control 40% of the banking sector. All banks in Egypt are supervised by the Central Bank (CBE) except for the Arab World Bank, the Nasser Social Bank, and the National Investment Bank due to special provisions in law and treaties.

The Central Bank of Egypt liberalized the exchange rate of the local currency (pound) under the economic reform program recommended by the International Monetary Fund (IMF) to give Egypt a $12 billion loan on November 3, 2016. The loan provides banks operating in Egypt flexibility to price the purchase and sale of foreign exchange to restore its circulation within legitimate channels and eliminate the parallel foreign exchange market. The Egyptian pound lost almost half its value, dropping from 8.88 per dollar to 17.5 a year after the exchange rate was liberalized and about 17.8 after two years of floating, before settling at £15.6 to the dollar.

In August 2021, foreign exchange reserves rose to 40.672 billion from $40.609 billion in July of the same year, increasing to $63 million. Foreign exchange reserves have been rising since June 2020, after falling to about $36 billion from over $45.5 billion due to the impact of the Covid-19 pandemic.

The stimulus plan launched by the Egyptian government in March 2020 in response to the Covid-19 pandemic caused the cash reserve to rise from about $40 billion during the 2019/2020 fiscal year to about $40.2 billion during the 2020/2021 fiscal year.

end of fiscal yearValue ($1 billion)
30/06/202142.000
30/06/202040.000
30/06/201944.258
30/06/201844.258
30/06/201731.305
30/06/201617.546
30/06/201520.082
30/06/201416.687
30/06/201314.936
30/06/201215.534
30/06/201126.564

Workforce

Egyptian workers pose for a photo by construction equipment
Egyptian workers pose for a photo by construction equipment provided by Egypt arriving at the Palestinian side of the Rafah border crossing between Egypt and the Palestinian Gaza Strip enclave on June 4, 2021. (Photo by SAID KHATIB / AFP)

The unemployment rate was recorded during the second quarter of 2021, 7.3% of the total labor force compared to 7.4% in the first quarter of the same year, a decrease of 0.1%, and a decrease of 2.3% from the corresponding quarter of 2020.

The unemployment rate was 7.2% in the fourth quarter of 2020, compared to 7.3% in the third quarter of the same year.

In an August 2021 statement by the Central Bureau of Mobilization and Statistics, it was revealed that:

38.4% of the young labor force has an average qualification.

22.6% of the young labor force has a higher university qualification.

17.8% of the young labor force has a lower-than-average qualification.

7.5% of the young workforce are illiterate.

6.1% of the young labor force reads, writes, and certificates literacy.

3.8% of the young labor force has above-average and below-university qualifications.

3.7% of the young labor force has a general/Azharitan secondary school.

The proportion of youth in permanent employment was 56.2% (53% male, 80.4% female). The balance of employees in a legal contract was 20.3% (15.7% male, 54.2% female).

The proportion of young people participating in social insurance was 23% of the total employed (19.4% male, 50.3% female); The proportion of young people participating in health insurance was 17.9% of the total operated (14% male, 46.5% female).

The unemployment rate among young people in the age group (18- 29 years) was 15.4% (10.9% males, 37.6% females). The number of young people is estimated to be 21.3 million, 21% of the total population (51.5% male, 48.5% female).

The unemployment rate among young people with a university qualification was 33.3% (23.5% male, 49.8% female), compared to 12% for those with an average technical staff (9.5% male, 33.5% female).

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