Egypt has signed a memorandum of understanding with the OECD to launch a three-year country programme aimed at addressing some of economic challenges faced by the Middle East and Africa region’s most populous country.
Under the new agreement, the Organisation for Economic Co-operation and Development will provide important analysis, advice and guidance, which the government intends to incorporate into proposed economic reforms.
The MoU was signed by Egyptian Prime Minister Mostafa Madbouly, who is currently visiting the OECD’s headquarters in Paris, and Mathias Cormann, the organisation's secretary general.
“Such a comprehensive Country Programme can help Egypt to increase its competitiveness and integration in the global economy,” Mr Madbouly said.
“The Country Programme will enable Egypt to advance on its priorities under the second phase of the National Programme for Economic and Social Reform. It will also serve as guidance for the implementation of the recently revised sustainable development strategy, Egypt Vision 2030.”
Egypt's economy was the only one in the Middle East to grow last year amid the Covid-19 outbreak, thanks to swift policy actions enforced by its government. North Africa's largest and the Arab world's third biggest economy expanded 3.6 per cent in the last fiscal year which ended on June 30, according to the International Monetary Fund. But growth is expected to decelerate to 2.5 per cent this fiscal year because of the lingering effects of the pandemic on the economy.
The OECD will oversee a total of 35 Egyptian national projects to ensure they are implemented in line with its core policy standards. The projects will each fall under the five pillars provided by the Paris-based organisation.
Under the first pillar, the country programme seeks to implement more inclusive and sustainable economic growth for Egypt and major obstacles to the country’s economic development will be addressed, including promoting more competition among the nation’s businesses.
The OECD sees great potential in Egypt’s economy but more work needs to be done to ensure an equitable distribution of this growth, the statement said.
The programme will also seek to promote innovation and digital transformations in Egypt, two areas it sees as instrumental in improving the nation’s education and helping it make better use of its population of 100 million.
Egypt currently spends only 0.72 per cent of its GDP on research and development, according to the OECD.
“While digital connectivity has improved, significant room for growth remains,” the statement said.
The programme will also address the prevalence of corruption in Egypt’s governance bodies. Through the implementation of administrative reforms, more effective legislation, newer regulations and stricter digital government mechanisms, the OECD will help the nation fight against corruption which “remains an important priority for Egypt as it aims to promote a greater level playing field for the private sector”.
The fourth pillar of the new programme seeks to address the scarcity of reliable statistics in Egypt, an important diagnostic tool through which the real, on-the-ground state of the economy, the population and the environment can be measured.
The last pillar of the new agreement seeks to improve sustainable development in Egypt by promoting green energy initiatives and helping President Abdel Fattah El Sisi's administration bolster its efforts to meet the UN’s sustainable development goals (SDGs), which were announced in 2015 and are compulsory for all member states, including Egypt.
The programme will also seek to improve female participation in all its pillars to help Egypt achieve gender equality across the board.
Additionally, small and medium-sized enterprises will be a strong area of focus for the new programme, which it sees as key to bringing the country’s informal sector into the fold.
Formalising an informal sector that accounts for 40 per cent of the country’s gross domestic product will in turn improve unemployment levels among the nation’s young people and its female workforce, the OECD said.
Currently, unemployment levels among young people and women in Egypt are 30 per cent and 22 per cent, respectively.