Making Egypt’s Post-COVID Growth Path More Sustainable

Just when Egypt had achieved a hard-earned economic stabilisation and was on track towards more sustainable growth, COVID-19 threw the country back into stabilisation mode. Building on the economy’s strengthened fundamentals, swift government intervention helped mitigate the pandemic’s economic fallout, seeing the economy through the storm with resilience. However, Egypt’s growth performance has increasingly relied on extractive industries and a large role of the state in the economy. Compared to emerging market peers, Egypt might not yet be fully exploiting its catching-up growth potential. Strong population growth amid low participation rates calls for a redoubling of efforts to make Egypt’s post-COVID growth path more inclusive and sustainable, with the non-oil private sector at its core. Unleashing the private sector’s potential for growth and job creation will require a more enabling environment for trade and investment by removing non-tariff barriers and creating a level playing field for investors, including vis-à-vis public and state-connected firms. Fast-tracking the twin transition towards a digital and greener economy would capitalise on the digitalisation push ushered in by the pandemic and help Egypt to reap its large opportunities for a green and sustainable recovery.