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Thursday, September 18, 2014
Egypt’s president Abdel Fattah El Sisi gave a speech recently saying, “This country is turning the corner on its recent unusual period of political strife and uncertainty, and a positive momentum has already begun.”
The president urged international investors to reconsider Egypt at Euromoney’s conference in Egypt titled Stability, Investment, and Growth. The leader said that now was the time for the global financial community to come to the North African country and witness the changes it has made over the past few years to reform its economy. Over the next five years, Egypt plans to see economic growth reach 6% and a decrease in the budget deficit bringing it down from 13.7% to 10% of GDP by 2015. El Sisi said the public debt will be put on a long-term sustainable path, falling toward 80% of GDP in the projected time frame from 94% at the end of fiscal year 2013/2014 with inflation falling to single digits.
The president recently decreased fuel subsidies to help the government’s budget, lowering the budget 2% of GDP. Sisi said that the country will eliminate the remaining subsidies for all commercial and residential users (sans liquefied petroleum gas). Egypt is also launching a PPP program to help address the country’s infrastructure needs while increasing private sector participation including in utilities and transportation. He said, “We expect to tender one project per month over the remainder of this calendar year, and six to seven projects in the next calendar year.” New buses are being introduced into Cairo as well as infrastructural changes like cemented bus stops as well as clean, new planted roadways.
The President added, “We know that we face many challenges ahead on both a macro and micro-level before we can fully realize these objectives, but Egypt is on the right track.”
The country’s debt to foreign oil operators was also discussed at the investment event with El Sisi saying that energy subsidy reform would strengthen EGPC’s financial position, preventing the accumulation of new debt. Smaller operators have seen a steady stream of back payments being made; however, a substantial amount is still owed. Larger foreign operators, due to the larger amounts owed, are marking off EGPC’s debt to them at a slower pace and the government is considering a number of options to accelerate full payment.
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