Minister of Planning, Economic Development, and International Cooperation delivers the opening speech at the 18th Economic Conference "People and Banks"

Minister of Planning, Economic Development, and International Cooperation delivers the opening speech at the 18th Economic Conference "People and Banks"

 

H.E. Dr. Rania Al-Mashat:

 

The current global financial system does not meet the needs of developing and emerging countries.

 Egypt is moving forward to enhance macroeconomic stability amidst regional and international tensions to achieve economic development.

 Launch of the “Framework for Sustainability and Financing for Economic Development” to drive sustainable growth and achieve integration between planning and international cooperation policies.

Implementation of the National Structural Reform Program to support the competitiveness of the Egyptian economy and improve the business environment.

57% of concessional financing and development partner investments directed to the private sector since 2020 have been allocated to the financial and banking sectors.

Development partner funding has supported the expansion of banks in green financing and the development of small and medium-sized enterprises (SMEs).

Intensifying efforts with international financial institutions to increase innovative financing mechanisms for Egypt's banking sector.

 

H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, delivered the opening speech at the 18th session of the "People and Banks" Economic Conference, organized by the Arab Media Center. The event was attended by Mr. Alaa Farouk, Minister of Agriculture and Land Reclamation; Dr. Mostafa El-Feki, Chairman of the Arab Media Center; Mr. Tarek El-Kholy, Deputy Governor of the Central Bank of Egypt; Mr. Mohamed El-Etreby, Chairman of the Federation of Egyptian Banks and CEO of the National Bank of Egypt; Mr. Hisham Okasha, CEO of Banque Misr; Mr. Yehia Abou El-Fettouh, Deputy Chairman of the National Bank of Egypt; and a select group of bankers and private sector companies.

 

In H.E.’s speech, Dr. Rania Al-Mashat highlighted that the conference serves as an important platform for dialogue and exchanging insights on the key issues facing those concerned with the Egyptian economy. H.E. Dr. Al-Mashat expressed gratitude to Dr. Mostafa El-Feky, Chairman of the Arab Media Center, for his efforts in organizing the conference, emphasizing the significance of the discussions addressing critical topics such as the challenges and opportunities facing the Egyptian economy amidst current regional and international changes.

 

H.E. Minister Al-Mashat explained that the global financial system is undergoing an unprecedented test, coinciding with an economic slowdown due to consecutive health, economic, and geopolitical crises over the past few years, compounded by challenges from climate change. These crises have negatively affected the ability of countries to meet their financial and developmental commitments.

 

H.E. Dr. Al-Mashat affirmed that these challenges have revealed the shortcomings of the global financial system in mobilizing stable, long-term financing on a large scale for investments needed to achieve sustainable development goals, particularly with increasing development needs in countries. H.E. noted that the financing gaps for developing countries range from $2.5 trillion to $4 trillion annually, and the developmental challenges have affected all countries, particularly those with lower growth.

 

H.E. Minister Al-Mashat continued: "Despite the efforts made by international financing institutions and governments, the severity of the challenges necessitates continued cooperation between regional and international financing institutions to provide fair and equitable financing that meets the developmental needs of countries.”

 

Furthermore, coordination between central banks and governments at the international level is crucial to confront escalating international crises through alignment of monetary and fiscal policies, ensuring that these policies are consistent with economic reform measures, thereby supporting a joint response to financial volatility.

 

Framework for Sustainability and Financing for Economic Development

 

H.E. Dr. Al-Mashat added that under these exceptional regional and international conditions, Egypt has worked through all its institutions to strengthen the resilience of its economy through serious reforms. H.E. pointed out that the Ministry of Planning, Economic Development, and International Cooperation, following its integration, launched the “Framework for Sustainability and Financing for Economic Development". This is based on 3 pillars: Formulating  Data-Driven & Evidence-Based Economic Development Policy informs educated discussions about the needs and opportunities in areas such as  human capital, industrial development, SMEs, technology, entrepreneurship, sustainable infrastructure, green investments, among others, while ensuring robust monitoring and evaluation mechanisms to track progress and optimize outcomes; Building a Future-Resilient Economy advances macroeconomic stability through the implementation of structural reforms to foster  economic competitiveness, macro-fiscal resilience and the green transition; and Optimizing Resource Allocation by adopting an integrated national financing framework that mobilizes domestic and international financing, thus allocating resources to priority sectors and supporting SDG acceleration.

 

National Structural Reform Program

 

Through the National Structural Reform Program, the government is implementing a range of reforms aimed at boosting confidence in the Egyptian economy and supporting inclusive and sustainable growth.

 

The first pillar of the Structural Reform Program targets strengthening macroeconomic resilience and stability, while the second pillar focuses on enhancing the competitiveness of the Egyptian economy, improving the business environment, and encouraging the private sector's role. The third pillar of the program supports the green transition, with reforms implemented to increase investments in renewable energy, establish Egypt's first voluntary carbon market, and other ambitious measures.

 

Financing for Development

 

H.E. Dr. Al-Mashat emphasized that the Ministry of Planning, Economic Development, and International Cooperation is working to advance financing for development efforts, with a focus on increasing green financing. Over the past years, Egypt has strengthened its international partnerships, reflected in an increase in the cooperation portfolio between the Egyptian banking sector and international and regional institutions. This has been achieved through the provision of concessional financing, credit lines, direct investments in companies, and other collaborative mechanisms. Since 2020, the portfolio of financing and investments from international institutions for the private sector in Egypt has exceeded $11 billion, with banks and financial institutions accounting for more than 57%. Many banks, including the National Bank of Egypt, Banque Misr, the Commercial International Bank, and Banque du Caire, among others, have benefited from these funds.

 

H.E. Minister Al-Mashat noted that these investments and financing have contributed to providing additional resources to Egyptian banks, enabling them to redirect these resources towards the development of the small and medium-sized enterprises (SMEs) sector. Furthermore, these efforts have bolstered the banks' commitment to expanding financing for environmentally-friendly projects, helping Egypt effectively contribute to its green transition goals.

 

H.E. Dr. Al-Mashat also mentioned the signing of an agreement for the Green Sustainable Industry Program (GSI) with the European Investment Bank, aimed at supporting the industry in improving performance, reducing resource consumption, cutting carbon emissions, and complying with environmental regulations. Through the GSI program, international partners are providing €271 million to finance resource efficiency, renewable energy, low-carbon hydrogen projects, and carbon removal projects. She highlighted that the success of this program opens the door for further collaboration with international institutions.

 

Additionally, the Ministry launched the executive agreement for the European Union's Trade, Industry, Growth, and Rapid Market Access Program (EU Tigara), which aims to achieve two key objectives: improving the capacity and efficiency of the Egyptian system for developing enterprises and trade, and increasing the participation of Egyptian small and medium-sized enterprises in selected industrial value chains.

 

H.E. Dr. Al-Mashat pointed out that international institutions have played a significant role in enabling Egyptian banks to issue the first green bonds for the private sector in 2021, and today, there is a significant evolution and diversification in the innovative financial instruments provided by international financing institutions to Egyptian banks. The European Bank for Reconstruction and Development (EBRD) recently announced the signing of the first-ever risk guarantee agreement worth €70 million with QNB Egypt, aimed at supporting the growth of SMEs and micro-enterprises in Egypt and mitigating credit risks. This agreement strengthens the innovative solutions offered by international institutions and reflects the deep trust between the banking sector and international financial institutions, opening the door for further constructive collaboration between international partners and banks in Egypt.

 

To strengthen this relationship, the Ministry of Planning, Economic Development, and International Cooperation launched the Hub for Advisory, Finance & Investment for Enterprises, as part of the government's efforts to leverage the best innovative financing alternatives available from international financing institutions and development partners to empower the private sector and maximize the benefit of developmental funding, technical support, and consultations, to stimulate the private sector's role in achieving inclusive and sustainable development.

 

H.E. Dr. Al-Mashat also reviewed the government's efforts to enhance the entrepreneurial and innovation environment across various sectors, through the establishment of a specialized ministerial working group for entrepreneurship. The group aims to advance the sector and encourage entrepreneurship to build a competitive economy that attracts investments. H.E. clarified that through this group, the Ministry is working hard to coordinate various government initiatives supporting startups, involving the startup community, supporting sectors, and all relevant stakeholders, including representatives of the Central Bank and commercial banks, in order to solidify Egypt's position as a regional hub for startups and entrepreneurship.