Egypt Strengthens Economic Partnership with Bahrain

See - Sada Elbalad

22-02-2025

Israa Farhan
Rania A. Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, participated in the Egyptian-Bahraini Governmental Committee meeting on trade, economic, scientific, and technical cooperation, held in the Kingdom of Bahrain.
The meeting was chaired by Mr. Ahmed Kouchok, Minister of Finance, and Sheikh Salman bin Khalifa Al Khalifa, Minister of Finance and Economy in Bahrain, with the participation of Eng.
Hassan Al-Khatib, Minister of Investment and Foreign Trade, and representatives from both governments and the business sector of the two countries.
In her speech, Al-Mashat emphasized the close partnership with Bahrain, highlighting the government's commitment to strengthening ties between the two countries across various economic, commercial, and investment fields.
The trade exchange between the two countries reached approximately $661.4 million in 2024.
Al-Mashat also pointed out Bahraini investments in Egypt in sectors such as finance, industry, construction, agriculture, tourism, services, and information and communications technology, in addition to Egyptian investments in Bahrain, which are concentrated in real estate and tourism.
She clarified that Egypt welcomes investors from Bahrain, offering numerous investment opportunities and enhancing cooperation in the field of entrepreneurship and startups, in line with the Egyptian government's focus on this vital sector and the establishment of a specialized ministerial group.
The Egyptian minister commended the joint efforts to convene the second session of the committee, despite the complex political, developmental, and economic challenges faced by the Arab region, which represents a pivotal stage in shaping the future of our peoples and future generations.
She noted that the world today is experiencing shared challenges, geopolitical tensions, and a decline in many development indicators, making it necessary to develop global financing systems to be more just, efficient, and effective.
Al-Mashat affirmed that, in light of these global developments, the importance of such high-level joint committees is underscored, representing an essential platform for dialogue and shared thinking to benefit from successful experiences across all fields and levels.
H.E. Minister Al-Mashat also highlighted national efforts to enhance macroeconomic stability and improve the business environment amid regional and global economic developments, setting ambitious developmental goals through Egypt's National Sustainable Development Plan: Egypt Vision 2030, which reflects the three dimensions of sustainable development: economic, social, and environmental.
She mentioned the Ministry's plan, in cooperation with the United Nations Development Programme, to launch the second phase of the localization reports for the Sustainable Development Goals (27 reports for Egyptian governorates), which serve as an essential tool for decision-makers and policymakers to direct development efforts effectively and respond to local needs, ultimately boosting inclusive and sustainable growth nationwide.
Al-Mashat reiterated that the Ministry of Planning, Economic Development, and International Cooperation is working on preparing a comprehensive executive plan aimed at promoting sustainable growth, macroeconomic stability, and job creation by focusing on improving the business environment and supporting trade-exchangeable sectors through the adoption of corrective fiscal and monetary policies, as well as the governance of public investments to allow space for the private sector—building a more dynamic, flexible, and competitive economy through increased investments.
H.E. Minister Al-Mashat added that Egypt continues its efforts to implement economic and structural reforms since 2016, to enhance economic competitiveness, improve the business environment, and increase the macroeconomy's ability to withstand external shocks, support the green transition, and open up future prospects for inclusive and sustainable development, maximizing benefits from developmental partnerships financially and technically.
These reforms are based on five main pillars: 1) strengthening macroeconomic stability, 2) restructuring Egypt's economic production through focusing on the real economy sectors, 3) improving competitiveness and the business environment, 4) supporting the green transition, and 5) improving labor market efficiency and the vocational education and training system.
Dr. Al-Mashat emphasized that these interventions have reflected positively on economic growth indicators, with the non-petroleum manufacturing sector leading positive growth after a period of decline.
The industrial production index grew following a series of declines starting from the third quarter of fiscal year 2021/2022. Private sector investments grew in the first quarter of the current fiscal year, accounting for 63% of total investments, with this positive momentum reflected in the Purchasing Managers' Index for January 2025, which achieved its best performance in 4 years, scoring 50 points, surpassing the neutral zone.
Dr. Al-Mashat also reviewed inflation rates, the rise in remittances from Egyptians abroad, continued growth in foreign direct investment, growth in tourism revenues, and the increase in foreign exchange reserves.
Dr. Al-Mashat pointed to the Egyptian labor market situation, noting that 2023 was one of the best years following the COVID-19 pandemic since 2020, as the Egyptian labor market was able to absorb around one million jobs.
One of the key sectors to absorb this number of jobs was manufacturing, which alone accounted for 255,000 jobs, or about 25% of the total jobs created.
The indicators show the recovery of Egypt's economic growth in the last quarter of 2023/2024, continuing into the first quarter of the current fiscal year 2024/2025 (with a growth rate of 3.5%).
This growth was driven by significant improvements in key economic activities such as manufacturing, electricity, and the banking sector.
It is expected that economic activity will continue to improve in the coming period, with the government committed to continuing effective measures to support macroeconomic stability, contain inflation, and stimulate private sector activity.
Dr. Al-Mashat mentioned that Egypt continues to implement structural reforms by applying good governance rules, enhancing investment spending efficiency, and setting a ceiling for public investments, which is one trillion Egyptian pounds for the fiscal year 2024/2025. The private sector is expected to account for 50% of total investments, compared to 43% in the previous year 2023/2024.
Al-Mashat confirmed that Egypt possesses many competitive advantages that enhance its ability to attract and increase foreign investments, including favorable infrastructure such as roads, ports, maritime transport, airports, and industrial and renewable energy complexes.
She highlighted a series of ambitious steps and measures being implemented to improve the investment climate, empower the private sector, and overcome challenges faced by investors.
Some of the key measures include the implementation of new tax policies, providing incentives for companies, issuing golden licenses, launching a national industrial strategy aimed at turning Egypt into a global industrial hub, and a national strategy for foreign direct investment in cooperation with the World Bank and development partners.
To activate this, the Egyptian government is working with the World Bank to discuss immediate actions that may be necessary to stimulate high and sustainable growth rates amid macroeconomic and external challenges. One of the key components of this cooperation with the World Bank Group is Egypt's ambitious green transition agenda.
The government has worked to increase the proportion of green public investments from 15% in the fiscal year 2020/2021, aiming to reach 50% by 2025.
On another note, H.E. Dr. Al-Mashat referred to the launch of the comprehensive national strategy for financing for development (E-INFS) in September 2024. The strategy aims to: (a) mobilize and align local public financing with national development priorities; (b) align private financing and investment; (c) align developmental cooperation; and (d) create an enabling environment and non-financial means for implementation.
The strategy includes all financing tools that the Egyptian government can use to address development gaps in various sectors.
H.E. Dr. Al-Mashat also highlighted that Egypt's distinguished national relations with development partners have provided concessional financing for the private sector amounting to more than $14.5 billion since 2020, in cooperation with multilateral and bilateral development partners.
These financing packages have been directed to support strategic sectors such as renewable energy within the "NWFE" program, small and medium enterprises, transportation, industry, agriculture, and trade, contributing to enhancing sustainable economic growth and improving the business environment.
H.E. Minister Al-Mashat concluded by stating that Egypt is continuing its strategic approach to diversify energy sources, enhance energy efficiency, and transform into a regional energy export hub by stimulating direct investments in this vital sector, alongside establishing economic partnerships with sister and friendly countries, particularly in the field of clean energy.