Minister of Planning and Economic Development Continues Review of Key Pillars of the Fiscal Year 2025/2026 Plan Targets before the House of Representatives

Dr. Rania Al-Mashat:

 

We aim to continue implementing the second phase of the structural economic reform program in the new fiscal year's plan.

700 billion EGP in investments in human development sectors during the upcoming fiscal year, a growth of 56% compared to the current fiscal year.

Expanding the scope of targeted social protection programs for the most vulnerable groups, with a focus on female heads of households and rural areas.

Making room for private sector contributions by the state continuing its policy of withdrawing from economic activity.

Continuing commitment to the governance of public investment and applying program and performance budgeting from both financial and planning perspectives.

 

 

 

H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, stated that the key pillars of the upcoming fiscal year's plan targets include the state's continued implementation of the structural economic reform program (Phase II) and the state's commitment to its international obligations before international and regional financing institutions. It also includes the continuation of the state's policy of withdrawing from economic activity to make room for private sector contributions, with ongoing coordination and integration between monetary and fiscal policies to achieve the stability of financial and banking transactions, provide means of financial sustainability, and ensure the alignment of implemented policies regarding inflation containment, governance of public investment (both current and investment), supporting small and micro enterprises, and targeting the protection of low-income groups.

This came during Dr. Rania Al-Mashat's review of the key pillars of the new fiscal year 2025/2026 plan targets before the House of Representatives, headed by Counselor Dr. Hanafy Gebaly, and in the presence of the esteemed members of the House.

 

 

Transition to Tradable and Export-Oriented Sectors

 

H.E. Dr. Al-Mashat mentioned that among these pillars is the change in the followed growth pattern by transitioning to a sustainable growth pattern based on tradable and export-oriented sectors and activities with high added value, instead of non-tradable and non-export-oriented sectors and activities. This aims to enhance the productive capacities of the Egyptian economy and create more productive job opportunities, within the framework of the national narrative for economic development, which targets promoting economic development and reforms for growth, employment, and achieving a resilient economy, through strategies to attract foreign direct investment, an industrial development strategy, public finance adjustment, and the development of planning tools.

 

 

Governance of Public Investments

 

H.E. Minister Al-Mashat highlighted that the 2025/2026 plan includes serious work to address the international liquidity problem by stimulating exports, developing remittances from Egyptians working abroad, increasing the country's resources from tourism and the Suez Canal, and encouraging foreign direct investments. This is in addition to maximizing the utilization of concessional development financing, debt swaps, and extending debt maturities, as well as adhering to the application of the prioritization concept to the governance of public investments, which gives priority to driving economic growth in the agriculture, manufacturing industries, communications and information technology sectors, and other sectors in which Egypt enjoys a comparative advantage such as tourism and logistics, alongside the priorities of service sectors concerned with health services, school and university education, and scientific research.

 

 

Human Resource Development

 

H.E. Dr. Al-Mashat pointed out that the state gives absolute priority to human resource development to achieve the strategic goal of "building the Egyptian person," which was evident in the pattern of total investment resource allocations. Approximately 700 billion EGP was allocated to human development sectors (education, health, and other social services) in the 2025/2026 plan, compared to investments of 447 billion EGP in the 2024/2025 plan, an overall increase exceeding 56%.

 

H.E. Minister Al-Mashat clarified that the targets of the new fiscal year's plan also rely on continuing all necessary measures to improve the investment climate and stimulate the private sector to conduct business through packages of facilities and incentives that encourage activity and reduce transaction costs. She noted the General Authority for Investment and Free Zones' issuance of an investment strategy (2023-2026) that included a package of incentives comprising 29 incentives aimed at revitalizing private investment and increasing its effectiveness in driving economic growth.

 

Development Financing for the Private Sector

 

In addition to the Ministry continuing to negotiate and coordinate with development partners to provide the necessary financing resources for the private sector on concessional terms, concessional development financing from multilateral and bilateral development partners amounted to about $4.2 billion in 2024, compared to $2.9 billion in 2023, exceeding the available government financing of $3.2 billion in 2024. Facilities for purchasing strategic goods also recorded about $2.2 billion.

 

H.E. Dr. Al-Mashat emphasized that these financings reflect the attractiveness of the Egyptian private sector and the success of the structural reforms implemented by the state in increasing private sector investments. On the other hand, financing for budget support and the supply of strategic goods amounted to about $4 billion during 2024.

 

H.E. Minister Al-Mashat pointed to the continued efforts of the Ministry to mobilize green and sustainable financing through the country platform for the "NWFE" program, which is a regional model and approach for concessional financing to address climate change issues (mitigation and adaptation).

The efforts made over two years since the program's launch in cooperation with development partners have succeeded in mobilizing development financing for the private sector in renewable energy projects (solar and wind energy) worth $3.9 billion, in order to add a renewable energy capacity of 4.2 gigawatts.

Furthermore, the development financing obtained by the private sector from multilateral and bilateral development partners during the period from 2020 to 2024 exceeded $14.5 billion.

 

The Minister emphasized the state's keenness to achieve integration between development planning and financial planning, with the aim of determining the required financing flows, enabling the state to develop a vision for priority development needs and find alternatives more effectively to finance programs and projects in order to achieve the set goals, as well as improving the efficiency of the state's resource utilization.

 

 

Egypt’s Integrated National Financing Strategy

 

H.E. Dr. Al-Mashat pointed out the government's launch, in cooperation with the United Nations, of "Egypt’s Integrated National Financing Strategy" during March 2025, which aims to promote sustainable development in line with Egypt's Vision 2030. She explained that the strategy aims to address the financing gap for seven key sectors – health, education, social protection, water and sanitation, transportation, climate change, and women's empowerment – which have been identified as national priorities by the Egyptian government.

The strategy also sets out a practical roadmap for sustainable and innovative financing through a set of measures to bridge the financing gap, including expanding partnerships between the public and private sectors, strengthening the green banking system, and intensifying financing tools to support priority sectors. In addition to establishing a governance and coordination mechanism to ensure the effective implementation of the strategy's recommendations in coordination with the two existing ministerial working groups on "Development Finance" and "Sustainable Finance."

 

 

Stimulating Innovation and Entrepreneurship

 

H.E. Dr. Al-Mashat continued that the key pillars of the upcoming fiscal year's plan targets include the continuation of efforts to stimulate innovation and entrepreneurship, within the framework of the Ministerial Group for Entrepreneurship, which aims to enhance the capacity of startups and the entrepreneurship ecosystem to achieve sustainable and accelerated economic growth based on competitiveness and knowledge. The government is also keen on reviewing and restructuring social support policies, taking into account the provision of social protection for low-income groups and expanding the scope of the sector to include all eligible individuals.

 

Expanding the Umbrella of Social Protection

 

H.E. Dr. Al-Mashat affirmed that the plan focuses on expanding the umbrella of social protection by considering a number of tracks in a balanced manner, including expanding the coverage of targeted social protection programs for the most needy groups, with a focus on female heads of households and Upper Egypt's rural areas, and supporting the sustainability of social protection programs similar to the Takaful and Karama program, with the expansion of conditional cash transfer programs and increasing allocations and assistance for each beneficiary/family. It also includes expanding the coverage of social insurance by encouraging workers to participate in social security systems and providing protection against the challenges of old age, unemployment, disability, etc., as well as working to maximize the utilization of concessional development financing provided by Egypt's development partners and the support of multilateral companies in this regard, and expanding the adoption of geographical targeting programs for the most needy and remote areas.

 

The Minister added that the plan's pillars also include continuing commitment to the governance of public spending, applying program and performance budgeting from both financial and planning perspectives, applying cost-benefit criteria to maximize the benefits of implemented projects, and targeting employment by providing approximately 900,000 job opportunities through the annual plan, allowing for a reduction in unemployment rates to about 6.5% of the total labor force.

This will be achieved by stimulating the expansion of medium, small, and micro enterprises, and strengthening linkage and networking relationships with large-scale projects, in addition to continuing to contain inflation, especially with its recent downward trend, which contributes to lower interest rates, thereby stimulating investment, as well as reducing the costs of living and social support allocated in the state's general budget. She explained that this comes through continuing to direct resources towards the real productive economy and continuing government efforts to control markets and expand outlets for distributing goods at reduced prices.