INTERVIEW - IFC committed to supporting Egypt transition to private-sector-led economy: Makhtar Diop - Economy

Al-Ahram Weekly

16-06-2025

Ahram Online has exclusively interviewed Makhtar Diop, managing director of the International Finance Corporation (IFC), during his visit to Egypt to explore how the corporation is partnering with Egypt to drive investment, enhance connectivity, and unlock the full potential of key sectors, from aviation and tourism to renewable energy and MSMEs.
As Egypt charts a path toward greater economic resilience, the role of strategic partnerships and private sector engagement has never been more critical.
Asset monetization and infrastructure development are emerging as cornerstones of the country's transformation agenda, and global institutions are stepping in to support and guide this transition.
Since beginning operations in Egypt nearly 50 years ago, IFC has invested and mobilized almost $10 billion in investment projects, with an advisory portfolio amounting to $25 million in the country.
Diop's insights highlighted the pivotal reforms shaping Egypt's economic future and the opportunities they create locally and across the African continent.
Ahram Online: What were the key highlights of your meeting with the Egyptian president regarding the asset monetization programme?
Makhtar Diop: The meeting highlighted a crucial phase in Egypt's economic strategy, focusing on the asset monetization programme.
The president reiterated the government's commitment to this initiative, emphasizing its potential to invigorate the economy.
We discussed the proposal to begin with the monetization of 11 airports, a strategic move to optimize state assets. We plan to launch tenders for the first airport by the end of 2025, marking a significant step forward.
Our conversation underscored the benefits of a portfolio approach. This approach allows for the simultaneous management of multiple assets, thus minimizing the risks associated with dependence on a single transaction.
By successfully executing the first transaction, we aim to instill confidence in the investment community and illustrate the viability and robustness of the broader monetization programme amid fluctuating political and economic landscapes.
We also discussed how to deepen collaboration between Egypt and the African countries.
President El-Sisi emphasized the importance of African collaboration in addressing various challenges such as economic development, security, and climate change. His leadership aims to strengthen ties within the continent through initiatives that promote investment, trade, and partnerships among African nations.
AO: The IFC is assigned as the technical advisor to the Egyptian government for the planned offering of 11 airports. Could you please expand on this?
MD: Egypt's 11 airports play a vital role in the nation's connectivity, facilitating domestic and international travel and serving as critical gateways for tourism, trade, and investment.
The airports are strategically located to enhance access to major cities, archaeological sites, and scenic destinations, contributing to Egypt's economy, which heavily relies on tourism.
Additionally, improved airport facilities enable better cargo transportation, boosting trade activities.
The airports are essential for Egypt's thriving tourism sector, significantly contributing to the economy. They provide access to historically rich areas like Cairo, Luxor, and Aswan, as well as coastal destinations such as Sharm El-Sheikh and Hurghada.
By increasing flight availability and improving facilities, these airports can attract more international visitors, thereby enhancing economic revenue from tourism, creating jobs, and supporting local businesses.
Infrastructural improvements such as modernizing terminal facilities, expanding runways, and upgrading baggage handling systems are crucial for enhancing airport efficiency.
Investments in technology, like automated check-ins and advanced security measures, can streamline passenger processing.
Additionally, expanding capacity to accommodate more flights and passengers will help support the growth in air traffic expected as tourism rises.
IFC provides financing, technical expertise, and strategic guidance for airport development projects.
This includes mobilizing private sector investments through public-private partnerships (PPPs) that can leverage domestic and international resources.
The IFC can also assist in improving operational efficiencies and enhancing the overall passenger experience.
AO: How can upgrades to airports impact Egypt's economy?
MD: Upgrading airports can significantly impact Egypt's economy by fostering growth in tourism and trade, reducing travel time and costs, and improving logistics capabilities.
By attracting more international flights, Egypt can boost tourism revenues, create jobs in the hospitality and service sectors, and drive demand for local goods and services.
Enhanced air cargo capabilities can also improve the efficiency of exporting Egyptian products, strengthening the economy.
Strategic partnerships with international airport operators, airlines, and logistics companies can bring valuable expertise and operational efficiencies to airport development.
AO: How is the IFC planning to assist Egypt in transitioning from a state-driven economy to a private-sector-led model?
MD: The IFC is fully committed to supporting Egypt's critical transition from a state-driven economy to a private-sector-led one.
Our approach involves not only funding but also addressing bureaucratic hurdles that currently deter private investment.
In my meetings with government ministers, they told me that they have identified regulatory simplification as fundamental, which includes streamlining processes and cutting redundant fees and taxes – IFC is supportive of this.
Accordingly, we can help create a more business-friendly environment.
Collaborative engagements with key ministries, such as the Ministry of Investment and the Ministry of Public Business Sector, are pivotal as they identify state-owned enterprises (SOEs) that could be considered for monetization and strategize on enhancing the governance and operational efficiencies of those remaining under state control.
Our comprehensive framework aims to establish an enabling ecosystem that encourages private sector participation, thus driving sustainable economic growth and creating jobs for the Egyptian population.
AO: What sectors were identified for investment and growth during your discussions with the Egyptian president?
MD: During our discussions, several sectors emerged as high-potential areas for investment and growth.
Tourism: We emphasized the importance of diversifying tourism offerings beyond traditional models. Egypt can leverage its rich historical and cultural assets by developing cultural, health, and business tourism. Initiatives to enhance tourist experiences can sustain revenue even during global fluctuations.
We emphasized the importance of diversifying tourism offerings beyond traditional models. Egypt can leverage its rich historical and cultural assets by developing cultural, health, and business tourism. Initiatives to enhance tourist experiences can sustain revenue even during global fluctuations. Construction: Egyptian construction firms have significant potential to expand into other African markets, particularly as the continent faces a growing demand for infrastructure improvements. This would benefit local companies and strengthen regional ties.
Egyptian construction firms have significant potential to expand into other African markets, particularly as the continent faces a growing demand for infrastructure improvements. This would benefit local companies and strengthen regional ties. Agriculture: We explored strategies to revitalize the agricultural sector, tapping into Egypt's historical strengths, particularly in crops like cotton. Innovations and investments in modern agricultural techniques could significantly enhance productivity and sustainability.
We explored strategies to revitalize the agricultural sector, tapping into Egypt's historical strengths, particularly in crops like cotton. Innovations and investments in modern agricultural techniques could significantly enhance productivity and sustainability. Trade and Integration: The discussions also focused on the importance of African integration. By leveraging the African Free Trade Agreement, we can boost inter-African trade and reduce reliance on non-African markets, enhancing economic resilience and collaboration.
AO: What strategies are being proposed to enhance trade among African nations, and how does the IFC plan to support this?
MD: The IFC spearheads the African Trade Initiative, which aims to strengthen trade relationships across African nations.
Key strategies include enhancing the capacity of local banks to provide trade financing, thereby minimizing reliance on foreign banking systems, which can be a bottleneck for trade.
By facilitating direct banking relationships and providing innovative funding solutions, we can streamline the flow of goods and services across borders.
Additionally, we are focused on creating platforms for knowledge exchange and collaboration among businesses, fostering a cooperative environment that not only boosts trade volume but also enhances overall economic resilience across the continent.
AO: What potential does the tourism sector have for economic recovery in Egypt, and how does the IFC plan to engage with it?
MD: The tourism sector is poised to play a crucial role in Egypt's economic recovery, offering substantial potential for diversification and growth.
Egypt can tap into new visitor demographics by broadening its attractions to include cultural and health tourism and creating more sustainable revenue streams.
The IFC is actively engaging with tourism projects to upgrade infrastructure and implement sustainable practices, such as the EDGE Advanced Green Building Certification for the Grand Egyptian Museum.
These initiatives not only promote cultural tourism but also enhance Egypt's profile as a destination for health tourism, leveraging its high-quality medical services.
Our support is focused on developing frameworks that sustain long-term growth in tourism, benefiting both the economy and local communities.
AO: How does the IFC view the role of Egyptian companies in the context of broader African development?
MD: The IFC is keen to empower Egyptian firms to leverage their capabilities and expand their operations across the continent, particularly in the construction and infrastructure sectors.
By building capacity and instilling best practices, we can position Egyptian companies to engage successfully in pan-African projects.
This not only bolsters their growth prospects but also fosters regional collaboration and integration, ultimately advancing economic development across Africa.
By facilitating partnerships and knowledge transfer, the IFC aims to create a robust ecosystem where Egyptian enterprises can thrive and contribute to the collective growth and prosperity of the continent.
AO: How can the IFC help stimulate private sector engagement in renewable energy projects in Egypt?
MD: The IFC recognizes the significance of renewable energy in Egypt's quest for sustainable economic growth and energy independence.
By facilitating investments in solar and wind projects, which have vast potential given Egypt's geographical advantages, we aim to enhance energy resilience.
Our strategy includes conducting feasibility studies, mobilizing public-private partnerships, and providing technical assistance to attract private developers.
Moreover, we are working closely with the government to enhance regulatory frameworks and create incentives for private investments in renewables.
By fostering an investment-friendly environment and supporting innovative financing mechanisms, such as green bonds, we can stimulate substantial private sector engagement in renewable energy, contributing to job creation and reducing carbon footprints.
AO: What is the potential of the healthcare sector in Egypt, and how can the IFC contribute to its development?
MD: The healthcare sector in Egypt holds immense potential for growth, especially as demand for quality healthcare services expands.
The IFC plans to enhance collaboration with private healthcare providers to improve service delivery, accessibility, and affordability.
We support investments in health infrastructure, medical technology, and healthcare professionals' training, aiming to uplift the country's overall healthcare standards.
AO: What are the key aspects discussed during your meeting with the Egyptian minister of investment and external trade?
MD: The minister was very keen on IFC's plans to ramp up its equity portfolio in Egypt and worldwide.
He was also interested in hearing about our new guarantee offering through MIGA, the risk insurance arm of the World Bank Group. We plan to triple our guarantee level to $20 billion by 2030.
The discussions also touched upon scaling up efforts on local currency financing and increased mobilization.
Today, for each dollar IFC invests, we mobilize two from other investors. We aim to raise this ratio in the very near future.
AO: How does the IFC support Egypt's efforts in the Micro, Small, and Medium Enterprises (MSMEs) sector?
MD: The IFC supports Egypt's efforts in the MSME sector largely through banking solutions such as providing special credit lines.
Additionally, the IFC is now working with non-banking financial institutions to reach more MSMEs and provide easier access to finance, which is a new direction in their strategy.
Since 2020, IFC has committed more than $850 million to MSMEs in Egypt through both financial and non-financial banking institutions, including equity. It focused on those led by women, helping them build businesses that foster innovation and strengthen communities.
AO: If you have a message at the end of this interview, what would it be? And to whom would you send it?
MD: Now is an ideal time for reforms in Egypt. The world is looking at Egypt due to its stability and market trust.
Once reforms aimed at simplifying processes and creating a level playing field are implemented, investments are expected to pour in.
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