Public-Private Sector Partnerships in Egypt

Al-Ahram, Egypt, January 14

Observers of public discourse in Egypt will notice allegations coming from notable businessmen claiming that the country’s public sector is “crowding out” the private sector by investing in areas where the latter have already succeeded. But the reality is that these allegations are simply incorrect. A simple look at the number of private companies currently engaged in mega projects across Egypt will suffice to provide this point. Indeed, the private sector is involved in the purchase and management of numerous industrial and agricultural projects that range from fish farms to greenhouses to the building of new cities. The private sector is an indispensable part of the Egyptian economy. To continue boosting the Egyptian economy, we must mobilize and integrate resources from both the public and private sectors, with each side performing what it’s best equipped to do. Egypt’s private sector, which totals 3.74 million businesses, employs roughly 78% of all employees in the country and contributes 72% of the total GDP. But it also has weaknesses. For example, 39% of it is concentrated in only four governorates, namely Cairo, Giza, Dakahlia, and Alexandria. Conversely, state-owned public institutions, despite their great weight, contribute only modestly to Egypt’s activity and don’t generate appropriate returns. A recent report from the United Nations Program for Doing Business ranked Egypt at the very lowest tier – exceeding the 100th rank – in terms of ease of doing business. This ranking compared Egypt not only to other countries of the world but also to Arab and African countries. The most dangerous thing is that the volume of births in Egypt now exceeds the total number of births in countries such as Britain, Germany, France, and Italy combined. The result is that Egypt needs to create one million real jobs every year, which requires an increase in total investments ranging between 25 and 30%. What Egypt needs are more megaprojects that produce this kind of economic activity and increase the overall productivity and competitiveness of the Egyptian economy. –Abdel Moneim Said (translated by Asaf Zilberfarb)