(Bloomberg) -- The World Bank Group urged Egypt to introduce more transparency about the state's economic activity, a step it said would encourage much-sought private investment.
A sweeping reform program that began in late 2016 has boosted macroeconomic performance and “restored confidence in the economy,” but the moves “have yet to trigger a marked and sustained increase in non-extractive private investment and exports,” the World Bank and International Financial Corp. said Monday in a joint report.
In recent weeks, the Arab world's most populous country has announced an initiative to offer up to full ownership in as many as 10 army-held companies as it seeks to attract more private investment. Authorities plan to increase the private sector's contribution to the economy to about 60% by June 2024 from close to half now, Planning Minster Hala El-Saeed told Bloomberg.
Egypt has significant room to export more and boost its external competitiveness, the World Bank group said. A transparent state-ownership policy and governance framework, streamlined tariffs and customs along with better transport connectivity could all play a part, it said.
While Egypt has a growing domestic market and is close to international markets, “in recent years, perceptions of a growing and privileged role of the state in economic activities” have deterred private and foreign investment, the group said.
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El-Saeed said that although the state had to step in during a period of political instability after the uprising that ousted long-time President Hosni Mubarak in 2011, “all state institutions are now eager for the private sector to have a greater role in development projects.”
The government about three years ago identified around 20 state-owned firms that could either be listed on Egypt's stock exchange or see additional stakes offered. One had been offered before the pandemic spurred a delay, although authorities have indicated preparations are underway for a resumption.
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