Minister of Planning and Administrative Reform Hala El-Said said that the government is working on designing an ambitious programme to formalise the informal economy, which some estimate exceeds the formal economy.
She added that the programme includes coordination with all sectors operating in the informal economy, provided that the programme includes incentives for the informal sector in the process of consensus and guarantees to enable them to enter the official sector without any additional losses or burdens.
She said that incentives to attract the informal economy include the availability of financing at competitive prices commensurate with their ability to pay interest and premiums, which would raise the value of the GDP.
He stressed that the initiative of the Central Bank of Egypt (CBE) to stimulate the small and medium enterprises (SME) sector will be used to oblige banks to allocate about 20% of their SME portfolio to stimulate the informal sector.
In a related context, El-Said revealed the work on the implementation of an integrated plan to automate all public services provided to citizens, including payment and collection services, in coordination with all government agencies.
“We currently have about 5 million government employees within the electronic system, about 6 million pensioners and 1.7 million citizens from the Takaful and Dignity Program.”
The farmer is also mechanised through the issuance of a smart card for the farmer, which includes all his data in coordination with the Agricultural Bank of Egypt (ABE). This will enable the farmer to obtain the required financing at competitive interest.
On the other hand, as part of the government’s efforts to stimulate the investment climate and create an advanced environment for doing business, the minister explained that a law is currently in progress to speed up the process of exiting the market.
El-Said explained that the steps to stimulate investment were the issuance of the Investment Law and the Licensing Procedures Law, which reduced the duration of licensing from 600 days to 30 days—and 7 days in some projects.
She added that the work is under way to amend the Law 141 on SMEs, which contributes to increasing the process of stimulation and increase rates of growth and GDP.
The minister revealed that the GDP growth rate for the last fiscal year was 4.2%, against the expected 4%.
“This is a major development driven by growth in investments, foreign trade and consumption, which are job-rich sectors, which led to a decline in unemployment to 11.9%,” she said.
The economic growth and national projects contributed to the creation of about 850,000 jobs during the past fiscal year against about 700,000 jobs provided by the economy during the past years.
The growth rate in the fourth quarter was 5% compared to 4.5% in the same quarter of the previous fiscal year, a positive development and a significant growth despite economic reform measures.
El-Said attributed this development to the growth of the sectors of telecommunications, construction, trade, and retail, noting that all sectors have achieved positive growth rates.
The growth rate was led by the telecommunications sector, which grew by 16.5% in the fourth quarter, 12.5% for the whole year, followed by the construction sector, which achieved a growth of 9.5%, the foreign trade sector, which achieved a 5.5% growth rate, and the manufacturing industries, which achieved a growth rate of 4%.
El-Said said that all sectors have achieved a positive growth rate, which sends a positive message for foreign investments.
Net investment inflows reached $7.9bn instead of $6.9bn, which pushed the balance of payments to improve over the past fiscal year, she said.
According to data published by the CBE on its website, the balance of payments achieved a total surplus of $13.7bn during the last fiscal year compared to $2.8bn in total deficit during the fiscal year of 2015/16.
The Central Bank of Egypt (CBE) said that about $12.2bn of this surplus is achieved in the period from November to June, the period following the decision to liberalise the exchange rate.
Pointing out that the high-rate of growth reflected on low unemployment rates, stable price levels, and increases in investments.