Planning Ministry participates in the OECD Forum for the Middle East and North Africa

The Ministry of Planning and Economic Development, represented by Dr. Ahmed Kamali, Deputy Minister of Planning, participated recently in the OECD Forum for the Middle East and North Africa, which precedes the Ministerial Conference of the Governance and Competitiveness Initiative for Development.
Dr. Ahmed Kamali, Deputy Minister of Planning and Economic Development stated that limiting the informal sector is at the top of the list of priorities in Egypt, explaining that there is a link between the informal sector and the level of development, as developing countries have large informal sectors and with the development of countries the proportion of the sector decreases. Kamali added that it is not necessary to wait for this gradual decline, but rather to accelerate this process and take the necessary measures to reduce the volume of informal employment.Kamali explained that the informal employment sector in Egypt is an important source of employment, as 55% of the workforce works in it, but on the other hand, the informal sector has a low multiplier value as one-third of the local income comes from this sector, but the productivity of this sector is low in Egypt and this Consistent with findings from La Porta and Schleifer (2014) research.Kamali explained that the pandemic revealed the dangers of informal work, referring to the Egyptian government's efforts to support workers in the informal sector, pointing out that about 1.6 million workers have benefited from the employment support initiative in its first phase, for which Egypt allocated about EGP 2.4 billion.



Kamali added that there are many challenges related to social protection in the informal sector, explaining that according to the economic multiplicity in 2018, 53% of the projects belong to the informal sector and then there is a decrease in the government's revenues through taxes, stressing that the transformation of these entities into formal companies will contribute to Increasing its productivity, along with reducing poverty and increasing state income.Kamali noted that there is a negative relationship between the level of development and the informal sector, as it cannot be said that this sector will disappear overnight, but its size must be reduced, explaining that existing informal projects and others are being established.Kamali stressed the need to focus on new entities that are preparing to enter the market to reduce the size of the informal sector over time, noting that there are also multiple incentives offered to companies that are transforming from the informal sector to the formal.He explained that any company that moves into the formal sector is exempt from taxes for five years, as well as newly emerging companies through the formal sector enjoy these facilities.Kamali pointed out that the Central Bank of Egypt facilitated obtaining financing for these companies and reduced the interest to 5% instead of more than 10% for new loans.