The market capitalisation of the Egyptian stock exchange (EGX) has grown 12 per cent in the year-to-date as the country’s economy recovers from the effects of the Covid-19 pandemic, Hala El Said, Minister of Planning and Economic Development, said on Tuesday.
The total value of the companies traded on the EGX reached 731.73 billion Egyptian pounds ($46.58bn), compared with 653.33bn pounds at the start of 2021.
“We are fully convinced that Egypt’s economy will recover from the pandemic’s effects through co-operation with the private sector,” said Ms El Said, at the third annual Egypt Economic Summit in Cairo.
The one-day summit brought together government officials and private sector decision-makers to discuss key topics related to the Egyptian economy.
The only economy in the Middle East to have grown last year amid the coronavirus outbreak, Egypt's gross domestic product rose 3.6 per cent in the 2019-20 fiscal year and 3.3 per cent in the 2020-21 fiscal year that ended on June 30, according to the International Monetary Fund. The country's growth is expected to accelerate 5.2 per cent in 2022.
At the onset of the Covid-19 crisis, the government supported the EGX with a 20bn-pound package.
The bourse recently accelerated its plan to list a number of state-owned companies. In October, shares of Egypt's state-owned company e-finance rose 40 per cent after pricing the country’s largest initial public offering since 2015.
Egypt has embarked on a comprehensive reform programme to improve the quality of life of citizens and boost the economy.
In the last seven years, since President Abdel Fattah El Sisi was sworn into office, investments in public infrastructure projects have amounted to approximately 2 trillion pounds, according to Ms El Said.
The most prominent social development project is possibly the Haya Karima (Decent Life) initiative, which was launched in January 2019. The initial phase targeted 375 villages and succeeded in reducing poverty rates by 11 per cent through providing job opportunities.
The next phase will address the development needs of 58 million citizens — more than half of Egypt’s population — in 4,500 villages over the next three years at a cost of 800bn pounds.
There has also been an increased focus on green projects, such as the establishment of Benban solar power plant in partnership with private-sector companies. Egypt was recently selected to host the Cop27 climate change conference in November 2022.
“We have many green initiatives in the pipeline, which will account for 30 per cent of all projects this year, and hopefully, 50 per cent by 2024,” said Ms El Said, who is also chairwoman of The Sovereign Fund of Egypt.
The fund was established in 2018 to attract private investments to Egypt and promote and co-invest in state-owned assets to maximise their value.
Recently, the sovereign fund and the planning ministry signed a contract with a consortium of three international companies to convert Mogamaa El Tahrir into a multipurpose complex.
Ayman Soliman, chief executive of the fund, speaking at the economic summit, championed the role of the private sector in helping the sectors most affected by the pandemic. These include health, tourism and trade.
“We need to have hotels in Cairo that are at the right level for the tourists that will be coming,” Mr Soliman said.
In the trade sector, Egypt has set a target of reaching $100bn in exports within the next four years.
Nevine Gamea, minister of trade and industry, said exports jumped during the first 10 months of 2021 to reach $25.9bn, an increase of 24.5 per cent compared with the same period in 2020.
The ministry has issued several new laws to encourage private-sector involvement, including simplifying procedures for obtaining licenses for industrial projects, Ms Gamea said.