Flotation, reduced subsidies increase growth to 6% in 2018: Finance Minister

Egypt's debt tripled in recent years due to the problems experienced during the last 40 years, says Al-Garhy

Beltone Financial Holding held a four-day investment conference on Monday under the title "Africa's Era, Egypt's Moment", with the participation of a number of senior government officials, heads of companies listed on the Egyptian Exchange and African stock markets, as well as fund managers from Egypt, the United States, Europe, and the Gulf states.
Minister of Finance Amr Al-Garhy said that Egypt has come a long way in its reform agenda, pointing out that Egypt inherited a tremendous amount of problems during the last 40 years, whose effects appeared clearly after the 25 January Revolution. Al-Garhy added that Egypt's economic progress stopped, while the government expenditure and budget deficit increased significantly, noting that Egypt's debt increased from EGP 1tn in 2010 to EGP 3tn in 2016.
He pointed out that the government started to work on achieving tangible economic growth since 2014 with the inauguration of President Abdel Fattah Al-Sisi, who pledged to settle Egypt's economic problems.
Al-Garhy explained that floating the Egyptian pound and cutting state subsidies, as well as applying a multi-faceted economic reform programme were unprecedented efforts, adding that these measures will help achieve a growth rate of 5.5-6% in the next year.
Al-Garhy pointed out that the burden of fuel subsidies was very high, while benefiting only about 20% of those who really need subsidies.
He added that these funds should be allocated to other strategic sectors such as health, infrastructure, and education.
Al-Garhy said that the flotation will contribute to restoring fair trade and the competitiveness of local industries, as well as support exports.
Despite Egypt's numerous economic sectors, the exports reached only $18bn compared to $120bn in Turkey and $200bn in Indonesia, he said.
Al-Garhy noted that Egypt should not rely on tourism revenue despite its importance because the sector is very sensitive to external factors, which means that Egypt must continue to diversify its economy through attracting more foreign investment.
Al-Garhy expressed his happiness of the efforts posed by international banks during his last promotional tour of US dollar-denominated bonds in the United Arab Emirates, New York, Boston, Los Angeles, and London. He added that Egypt achieved the largest bond issuance in Africa, by 790 purchase requests compared to only 290 in a similar issuance in 2015.
Al-Garhy concluded his speech saying that the government will exert more efforts to attract foreign investment through amending legislation, such as the bankruptcy and investment laws, to support the Egyptian economic reform programme.