Cairo – Egyptian Prime Minister Mostafa Madbouly met with a group of senior businessmen in a remarkable step to listen to their opinions and perceptions about economic problems and ways to address them.
However, in the absence of clear outcomes from the meeting, several questions emerged, especially in light of Egypt’s commitment to a program of economic measures with the International Monetary Fund to increase the role of the private sector and reduce the state’s presence, including reducing the role of economic institutions affiliated with the army.
While businessmen put forward what they called a “rescue recipe,” the most important question remains: Do these proposals contain real solutions capable of saving the Egyptian economy from its complex crises? Or does it serve the interests of specific groups at the expense of a comprehensive national vision?
New convictions
The Egyptian Prime Minister acknowledged that through experience, the state has become convinced that the private sector is the most qualified to manage and operate due to its great experience in this matter, indicating that this meeting aims to determine Egypt’s needs during the coming period, with the aim of moving very quickly in this regard.
Madbouly described the private sector as the locomotive of development in the Egyptian state, stressing the importance of its investments, but he attributed the increasing role of the state to the state of instability that Egypt has experienced since 2011, and thus the decline in the role of the private sector and its fear of expanding investments.
During the meeting, Madbouly revealed that Egypt paid $39 billion during the year 2024 (debt and interest installments) and that the total external debt amounts to about $152 billion, adding that paying this debt was a source of serious concern, but the government has paid all its obligations.
Most prominent challenges
During the meeting with the government, businessmen and investors presented the most prominent challenges facing the private sector that hinder the real growth of the economy in some points, the most notable of which are:
- High public debt: Whether domestic or external, which constitutes a large burden on public resources, and limits the government’s ability to invest in development projects.
- High interest rates This negatively affects the cost of financing for companies and limits private investment.
- Trade balance deficit: The Egyptian economy suffers from a chronic trade deficit and a dollar deficit, which leads to pressure on the Egyptian pound.
- High inflation The slowdown in economic growth, especially in vital sectors such as building and construction.
- Complex bureaucracy Which hinders investment and private sector work.
Suggested recipe
The prescription for treatment presented by businessmen included a set of proposals, some traditional and others bold:
- Establishing a new fund, selling state assets to the Central Bank of Egypt, and canceling the state’s debt.
- Reducing interest rates to stimulate investment.
- Focus on developing the tourism sector and doubling its revenues.
- Simplifying bureaucratic procedures and providing a more attractive investment environment.
- Lifting restrictions on construction in order to increase growth rates of the building and construction sector.
- Returning employment to the state’s administrative apparatus and appointing young graduates to deal with developments in the private sector.
“Word” or “recipe”?
The economic expert and former member of the Economic Committee in the Egyptian Parliament, Mohamed Fouad, believes that the meeting was nothing more than a normal meeting between the Prime Minister and a number of influential businessmen and investors to listen to their opinions and not to develop a recipe for saving the Egyptian economy.
Fouad told Al Jazeera Net that the meeting was not attended by everyone, and that the government did not have an agenda for managing the meeting, and some of the attendees did not bother to prepare proper data, so it seemed like a “speaker.”
According to Fouad, the outcomes of the meeting were compatible with the priorities and needs of private businessmen, which may not necessarily represent the broader interest of the national economy. However, he stressed the importance of listening to their opinions and viewpoints.
The economic expert pointed out the disparity of interests between the parties, citing the controversy over high interest rates. From the perspective of the country’s interest and the stability of the economy, this requires the continuation of the monetary tightening cycle. As for the interests of the attendees, they are represented in lowering interest rates to reduce the burden on their economic activities.
Dominance or partnership?
The Undersecretary of the Ministry of Trade and Industry for Economic Research, Dr. Abdel Nabi Abdel Muttalib, said, “The aim of this meeting is divided into two parts, the first of which is a message to the IMF regarding Egypt’s pledges to increase the role of the private sector and reduce the role of the state, and the second is to seek the expertise of senior businessmen and financiers in the Egyptian economy.” .
He explained to Al Jazeera Net that, during the past ten years, the state played the role of the largest investor in the Egyptian economy, which limited the opportunities for real competition. However, the state recently realized the importance of strengthening the role of the private sector, and giving it a broader space to contribute to development and participate in decision-making.
Regarding the control of the meeting by businessmen from the era of former President Hosni Mubarak, Abdel Muttalib pointed out that some of these individuals represent the families of the capitalist class for decades in Egypt, whether since the Mubarak era or before, and are not deal owners, indicating that what they demanded is tantamount to a “prescription.” “A practical (recipe) for resolving complex economic situations, but it needs to be implemented on the ground through economic minds and expertise.
It is noteworthy that Egypt reached an agreement with the International Monetary Fund last month at the expert level that allows Cairo to disburse a tranche worth $1.2 billion to Cairo, within a lending program worth $8 billion.
Ivana Vladkova Hollar, who headed the International Monetary Fund delegation to negotiate with the Egyptian authorities, said in a statement at the time: “There is a need to reduce state participation in the economy and increase private sector confidence.”
