Egypt should prepare for the post-coronavirus (COVID-19) period by focusing on digital transformation and logistics services, according to Ahmed Shams El-Din, Head of Research at EFG Hermes.
Shams El-Din’s comments came during a jointly held webinar, “After the coronavirus: The new reality and its impact on the pace of business and how to adapt”.
During the webinar, Egypt’s economic priorities were outlined as the country prepares for the post-coronavirus (COVID-19) existence.
He added that Egypt should prepare for the coming period by focusing on logistics services. As the world’s trend towards a new economic system that depends on blocs, this would come in addition to the need to focus on digital transformation.
Shams El-Din said that the effects of the coronavirus have imposed major changes worldwide. All expectations indicate a decline in global growth of 3%, if not more.
He noted that this requires rapid action to prepare for that new reality. Emerging markets in particular are witnessing a decline in domestic demand, with a crisis in the global market as a result of the trade dispute between China and the US.
Indications show that Egypt is in a slightly better position, but that the crisis lies in labour and employment, as 70% of Egyptian expatriate workers are in Gulf Cooperation Council (GCC) countries.
He noted that the health sector, as well as e-commerce and financial services, will witness significant growth during the coming period, with tourism still able to restore its previous rates. Moreover, these sectors will, within three years, have a different form.
Shams El-Din said that the expectations indicate a total growth of 2.3% this year in light of the current situation, with a relative return to normal during the last quarter (Q4) of 2020.
He expects inflation rates to increase, especially with the Egyptian pound’s recent depreceiation against the dollar, and ruled out more noticeable movements in the exchange rate. He also suggested that interest rates will remain at the same levels.
During the webinar, Mohammed Khodeir, Founder and Managing Partner of Khodeir Consulting, said that preparing for the next stage requires work on the legislative component.
The Egyptian government has already initiated this work in recent past months, through procedures under Article 147 of the Civil Code. These have taken charge of regulating that part, in addition to allowing the use of the so-called “golden licence”.
He added that the current period is a good opportunity to create a better investment climate, especially as all global investment indicators are suffering under the same major crisis. This can be carried out by focusing on the legal dimensions and legislative aspects, Khodeir said.