The Bank Group’s Country Strategy Paper (CSP) for Egypt covers the period 2007-2011. The CSP is well aligned with the government’s development agenda.  The design of the assistance strategy is underpinned by Egypt’s vision 2022, its fifth Five-Year Plan (2002-2007) and its Ten-Point Action Plan, whose objectives are to promote private sector-led growth, modernize the Egyptian economy and integrate it into the global economy. Given that the CSP period goes beyond Egypt’s fifth Five-Year Plan, the Bank Group’s short-to medium-term business plan covers the period 2007-2008, corresponding to the end of the fifth Five-Year Plan period.

Egypt is an economically diversified middle-income country with a private sector that employed 77% of the country's active population and accounted for 62.9% of GDP in the 2007/08 financial year. The prospects for medium term growth are good and could further be enhanced by accelerating structural reforms. The country has substantial natural resources, including oil and gas, which are important sources of foreign exchange earning. The country is also sufficiently diversified in terms of its agriculture and industry and can therefore expand its agro-based production and light manufacturing. Egypt can also further capitalise on its strategic location to increase revenue from the Suez Canal, and on its historic, cultural and geographic endowments to attract tourists.

Development Policy

The main elements of the government's development agenda are export promotion, a deepening and modernisation of the industrialization process, focusing on capital goods and high value production, and a reduction in unemployment through labour-intensive techniques and the promotion of small- and medium-scale enterprises (SMEs). Others include the direction of development towards desert land and the correction of spatial imbalances, poverty reduction and improved equity, gender equality and women empowerment, and environmental protection. The pursuit of this development agenda is guided by the country’s Ten-Point Action Plan.

Driven largely by the government’s economic reform policies and strong demand in manufacturing and construction sectors, real GDP growth reached 7.2 percent during the 2007/2008 financial year. Meanwhile, the ongoing global financial crisis is negatively affecting the Egypt's economic performance and real GDP growth is expected to slow down to around 6 per cent for financial year 2008/09. The 2007/2008 financial year saw Egypt attain record levels of foreign direct investment (FDI) and allowed the country to be the first FDI receiver country in Africa.

The government's five-year National Development Plan (2007/08 to 2011/12) includes an annual real GDP target of 8 per cent. The plan acknowledges the need for rapid, sustainable economic growth to reduce the large public debt burden and raise living standards. To achieve this, the government will continue to push ahead with economic reforms and liberalization.

Bank Group Strategy

The Bank’s active public sector portfolio comprises nine operations for  a total commitment of UA 791 million. Through its Egypt Country Office (EGFO) in Cairo, the Bank maintains close collaboration with the Egyptian government. The overall performance of the Bank’s portfolio in Egypt is satisfactory. The average time it now takes to move projects from approval to effectiveness has significantly improved. The  average project size has increased from UA 32.16 million to UA 102 million.