At the opening session of the International Council for Small Business (ICSB), Chairman of the Administrative Control Authority (ACA) Minister Mohamed Erfan presented the Egyptian experience in achieving the Sustainable Development Goals (SDGs) before representatives of 70 states during his visit to New York chairing a high-level delegation featuring board members of the National Anti-Corruption Academy, namely the Minister of Investment and International Cooperation Dr. Sahar Nasr, Egypt's Attorney General Counselor Nabil Sadeq, Head of the Central Auditing Organization (CAO) Counselor Hesham Badawy and Head of the Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU) Counselor Ahmed Saeed Khalil.
Mr. Erfan emphasized that Egypt was undergoing a new transformation phase in its modern history which merits the attention of researchers in the political, economic, security and strategic areas. Since the beginning of 2011, Egypt has undergone two revolutions and succeeded in passing through this phase motivated by sincere efforts and hard work, stated Mr. Erfan, who added that, over the past four years, Egypt’s leadership, government, and people spared no efforts to achieve targeted goals in all areas.
Since 2014, Egypt adopted structural reform policies that depend on diversity in its plans and expenditure efficiency, besides directing projects toward achieving SDGs, given that Egypt’s political leadership is still committed to implementing such policies, mentioned Mr. Erfan.
Further, he pointed out that the Egyptian economic reform program is characterized by reforming the public finance management - including restructuring subsidies- particularly energy subsidies, increasing efficiency of the food support programs, and introducing new social support programs that depend on conditional and unconditional monetary support and target the most vulnerable groups according to identified controls and conditions to ensure the expenditure efficiency. The program is also characterized by expanding infrastructure projects and major development projects in agricultural, industrial, logistic, commercial and maritime areas, which will pave the way toward foreign direct investments (FDIs), create further job opportunities, and improve public services along with considering the environmental dimension in line with SDGs developed by Egypt in its strategic vision for 2030.
Moreover, Mr. Erfan referred to the positive indicators of the recovery of the Egyptian economy, among of which are increasing the economic growth rates from 2% during the period 2011-2013 to over 5%, decreasing the budget deficit from 13% during 2012\2013 to 9.8% of the GDP during 2017\2018, and increasing the net FDIs to approximately USD 8 billion during 2017\2018 compared to USD 2.2 billion in 2011; in addition, trade deficit declines by 64% during the first half of 2017\2018.
According to Mr. Erfan, among the government’s key goals during the upcoming period is creating further job opportunities for youth in various economic sectors, especially through entrepreneurship and micro, small and medium enterprises (MSMEs). He emphasized that several international studies emphasized the significance of the MSMEs sector, noting that about 75% of Egypt’s labor force work in this sector through over 2.5 million MSMEs and that micro enterprises employ less than 50 workers and represent 99% of the total projects of the non-agricultural private sector in Egypt. In addition, he stated that 80% of such enterprises operate outside the formal economy and that several studies assert that employment in informal sector accounts for approximately 58% of the employed in Egypt’s private sector. Informal employment in economy accounts for 8.2 million workers, compared to 6.8 million workers in the formal private sector and 5.9 million ones in the public sector.
In addition, Mr. Erfan highlighted Egypt’s keenness on the MSMEs sector through some legislations that target facilitating the work of such enterprises, topped by Micro-Finance Law No. 141 of 2014, some articles in tax legislations, Law No.5 of 2015 on the preference of local products in government contracts, Law No. 15 of 2017 on the Facilitation of Procedures for the Granting of Licenses to Industrial Establishments, and Investment Law No. 72 of 2017. On the institutional level, there are several initiatives to coordinate efforts between various state institutions in the said sector, given that The Micro, Small and Medium Enterprises Development Agency (MSMEDA) was established in 2017 under the umbrella of the Ministry of Trade and Industry to replace the Social Fund for Development (SFD).
During the past few years, Egypt worked on supporting entrepreneurship, evidenced through the President’s launching of the “Pioneers of Communication Technology” initiative in 2015 to empower youth, launching of the Investment Law which provides investment incentives to SMEs, linking the entrepreneurship curriculum to several educational levels by the Ministry of Education, and allocating EGP 200 billion to the finance MSMEs by the Central Bank of Egypt (CBE) with an interest of 5% to finance over 350 enterprises and provide about 4 million job opportunities. This is in addition to the Prime Minister Decree establishing the MSME Development Agency to encourage entrepreneurship projects, MIIC’s establishment of Egypt Ventures which launched “Fekretak Sherketak” Initiative to select those who have ideas for fast-growing projects in partnership with Hermes Financial Group, the United Nations Development Program (UNDP), the Ministry of Local Development “Your Project Initiative”, the CBE “Nile Pioneers Initiative”, and the Federation Of Egyptian Industries (FDI) “Egypt Manufactures Initiative”, besides the government’s recent draft law for MSMEs’ development expected to be presented to the Parliament in a short period of time. The draft law includes a comprehensive regulation of this sector and facilitation of its regulatory procedures. It also includes an encouraging package of incentives that entices the informal sector to voluntarily move to the formal economy to contribute to increasing job opportunities and achieving targeted economic growth. This is in addition to “Egypt’s Street Initiative” which is a pilot project for allocating a specific place in Cairo for owners of micro enterprises (such as fast food carts) through granting youth licenses to establish their projects in this place, thereby providing job opportunities by facilitated procedures within a formal framework.
Mr. Erfan also pointed out that other efforts are being exerted to consolidate the culture of self-employment and build a developed Egyptian personality through an ambitious future vision for the development of the education system in the university and pre-university levels. In this context, a new law was issued to open branches of international universities in Egypt, Individually or in collaboration with Egyptian national universities and institutes. The new law will allow universities and research centers to improve their performance by linking research and studies to the real needs of development and fostering initiatives, scientific innovations, and patents.
At the same time, the Egyptian state adopts an ambitious plan to develop pre-university education in Egypt to be based on thinking, creativity, and support of intellectual abilities and skills rather than rote learning. This plan explicitly supports the technological component in the educational process so that the student can be able to use the latest sources of available knowledge, and access the digital world. Although the Egyptian government is aware of the difficulty of the task in a sector of nearly 20 million students receiving education in more than 53,000 schools through over one million teachers, the government is committed to implementing this plan and rendering it successful. In April, the Egyptian government signed an agreement worth USD 500 million with the World Bank to support the pre-university education reform project in Egypt, given that the former will provide USD 1.5 billion from the State Treasury for the implementation of the plan.
As mentioned by Mr. Erfan, according to the President’s directives, the new Administrative Capital and the new Alamein City would include branches of major international universities in Egypt in order to integrate urban development with scientific, research and technological development. He further called on ICSB’s members to participate at the World Youth Forum scheduled to be held in August 2018.
On her part, the Minister of Investment and International Cooperation spoke at another session on entrepreneurship, emphasizing that entrepreneurship would achieve inclusive and sustainable development.
She indicated that President Abdel Fattah el-Sisi developed an ambitious vision for the country’s advancement and, accordingly, the Egyptian government was keen on adopting a strong economic reform program in line with priorities of the Egyptian people in order to achieve inclusive development, advance the national economy and improve the investment climate.
Further, the Minister reiterated that among the Egyptian government’s priorities was supporting entrepreneurs, particularly those who provide new and innovative solutions for facing challenges in several sectors. Within this framework, Egypt focused on empowering youth, supporting small investors, and creating a new integrated system that helps entrepreneurs achieve aspirations of youth within the framework of the new Investment Law that provided for supporting startups, entrepreneurship, and SMEs.
In 2017, Egypt launched Egypt Ventures to support youth entrepreneurs and encourage investments in technology and innovation. During the first phase, 3609 ideas were received from 27 governorates in the sectors of health and renewable energy, besides establishing the biggest business accelerator in Africa and the Middle East and the entrepreneurship service center at MIIC to provide entrepreneurs with all kinds of legal and technical support, mentioned Dr. Nasr.
Finally, the Minister emphasized fulfilling commitments to SDG 8 ‘adequate job and economic growth’, noting that women’s empowerment was a solid investment and had great returns on the whole society.
