Egypt

Implications, Challenges and Recommendations

Overview

Political turmoil in Egypt has led to slow economic growth, though this should accelerate somewhat over the next three years with the assistance of the IMF loan. As part of the conditions of the loan, medium term macroeconomic targets have been developed to address slow economic growth and job creation, fiscal consolidation, price stability, human capital, boosting domestic investment, improving export performance, and accelerating infrastructure development and productivity.

Egypt has immense room for improvement in its economy and the following favour its growth potential: a young dynamic population, a large market size, a favourable geographical location, access to important foreign markets, the government’s large investments in the energy sector, and a recently discovered Zohr gas field.[73]

For policymakers

The Egyptian government should focus on policies and initiatives that attract foreign investment. Making it easier to conduct business in the country as well as improving Egypt’s international competitiveness are two measures that should be taken in this regard. In 2016, the World Bank’s Ease of Doing Business Index 2017 ranked Egypt 122nd out of 190 economies.[74] The government urgently needs to streamline and simplify the regulatory environment to make doing business less cumbersome. The Global Competitiveness Report indicates that Egypt’s policy instability, government instability and access to financing makes doing business in the country difficult.[75]

Egypt also ranks poorly for international competitiveness, at 115th out of 138 countries in The Global Competitiveness Report 2016-2017.[76] The country’s labour market efficiency ranking of 135th is one area that the government needs to urgently address. A further area the government urgently needs to improve on is corruption – as government corruption is highly pervasive. This acts as a deterrent for foreign investment that is urgently needed for economic recovery.

For the HR fraternity

Egypt currently presents a difficult economic environment in which to conduct business. Government corruption is pervasive, and business should be wary of engaging in corrupt activities. Local businesses should be open to assisting foreign investors to navigate the challenges of doing business in Egypt.

Firms should be aware of hardships faced especially by their low-income employees due to higher inflation and the reduction in fuel subsidies, which will likely severely impact living standards. Where possible, firms may consider offering additional support to these employees, though it is likely that firms themselves (especially those whose business relies on imports) will struggle until the currency stabilises. Firms benefitting from higher export incomes since the depreciation of the pound may be better positioned to act to protect their employees from harsh economic conditions.

  • Country Profile
  • Introduction
  • Broad Economic Indicators
  • Currency and Exchange Rate
  • Competitiveness and Ease of Doing Business
  • Foreign Investment and Largest Companies
  • Foreign Aid
  • Country Strategic Framework
  • Summary of Economic Conditions
  • Implications, Challenges and Recommendations
  • Population
  • Living Standards and Poverty Levels
  • Healthcare
  • Implications, Challenges and Recommendations
  • Qualifications Profile of the Population and Workforce
  • Levels of Schooling and Basic Education
  • Technical and Vocational Education and Training
  • Tertiary Education
  • Innovation in Egypt
  • Implications, Challenges and Recommendations
  • Labour Force
  • Employment by Sector
  • Employment by Skill Level
  • Employment by Occupation
  • Labour Productivity
  • Unemployment and Job Creation
  • Expatriates, Immigrants and the Egyptian Diaspora
  • Wage and Salary Trends and Social Insurance
  • Industrial Relations Framework
  • Labour Market Efficiency
  • The Fourth Industrial Revolution
  • Implications, Challenges and Recommendations

Economy

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