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International Cooperation Minister Al-Mashat, private sector discuss economic challenges of COVID-19 - Daily News Egypt

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International Cooperation Minister Al-Mashat, private sector discuss economic challenges of COVID-19

Minister and representatives from international financial institution, private sector discuss mechanisms to deal with pandemic

Minister of International Cooperation Rania Al-Mashat met with international financial institution and private sector representatives to discuss help for the private sector in overcoming the ongoing coronavirus (COVID-19) pandemic.

The meeting, held via videoconference, which was attended by representatives from the agriculture, manufacturing, energy, and logistics sectors, discussed how to weather the negative economic effects of the pandemic. The private sector’s readiness to overcome challenges and identifying potential opportunities was also discussed.

The meeting, held via video conference came at the invitation of Minister Al-Mashat, and was organised by the International Finance Corporation (IFC). It occurred in the presence of IFC officials, alongside representatives from the World Bank, European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and African Development Bank (ADB).

During the meeting, the minister highlighted the private sector’s role as a catalyst for development. She invited private sector participants in the meeting to present the main challenges they face due to the economic effects of the coronavirus.

Minister Al-Mashat stated that her ministry’s vision is for greater private sector participation in development, given its role as a major engine for Egypt’s economic growth. The ministry aims to nurture the integration of development projects funded by development partners and private sector investments, by strengthening partnerships in implementing development projects.

She pointed to the Ministry of International Cooperation’s new strategy launched to create collaborations with development partners. The strategy focuses on three main points, including making the citizen the project’s focus, and keeping the goal as the driving force.

Minister Al-Mashat added that public-private partnerships acknowledge existing gaps which have been highlighted by the coronavirus crisis. The partnerships also provide support across multiple sectors to millions of beneficiaries, pushing citizens towards unlocking their full potential.

The private sector representatives said that these measures have contributed to achieving a balance between maintaining production levels whilst taking the precautionary measures necessary to protect the labour force.

They also said that the food industry sector has been able to protect supply, despite the challenges in market supply and delivery operations that have impacted the supply chain. The representatives added that the real challenge lies in 2021 if the crisis continues, as it would impact the demand for goods and undermine the clients’ ability to pay.

They also said that the second half (H2) of 2020 and start of 2021 will be more challenging for projects, which could lead to some being suspended if the crisis persists.

They stressed, however, that Egypt has taken unprecedented steps in the new and renewable energy sector. These have enabled the country to increase its economic growth in this sector and achieve sustainable development goals despite the negative effects of the coronavirus.

Minister Al-Mashat said that, following the pandemic, international institutions have offered funds in the form of credit lines to private sector companies to increase liquidity.

The Ministry of International Cooperation has noted that the World Bank Group (WBG) has leant its support to Egypt’s efforts in implementing and financing structural reforms, projects, and public policy measures. These have been designed to enable the private sector to play a greater role in development, economic growth, and job creation.

Heike Harmgart, ERBD’s Managing Director for the Southern and Eastern Mediterranean (SEMED) region, confirmed that the bank has decided to significantly expand its “Flexible Framework”solidarity package. The package received a €3bn injection of funds, rising from €1bn to €4bn.

She stated that it focuses on financial institutions, small- and medium-sized enterprises (SMEs), tourism and transport companies, agricultural businesses, and medical supplies.

Alfredo Abad, Head of the EIB’s regional office in Cairo, said that the bank’s work supporting the private sector is focused on providing financial liquidity. Although the EIB participates in a number of European countries, it has contributed €500m towards the EBRD’s €20bn fund for countries outside the European Union.

Abad said that his bank is currently supporting nearly 300 SMEs, and is ready to increase credit lines. He added that new lines will be provided through banks, alongside cooperation with the private sector in pharmaceuticals.

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