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Leveraging large-scale investments and financing, Egypt undertook monetary and exchange rate adjustments to address the foreign currency crisis that has been prevailing since 2022. The Central Bank of Egypt (CBE) allowed the Egyptian pound to depreciate vis-¨¤-vis the dollar to address distortions in the foreign exchange market. In tandem, the CBE also increased key policy rates to control inflation and support the local currency. The government introduced mitigation measures, such as increased cash transfers and a higher minimum wage. The measures are supported by significant investments from the UAE and the completion of IMF reviews (originally slated for March and September 2023).

The recent adjustments seek to redress long-standing fiscal and external imbalances, worsened by multiple global shocks. The economy has been shifting towards non-tradable and low value-added sectors over the years, leading to underperformance in exports and FDI. High government debt (last reported at 95.2 percent of GDP at end-FY23), and thus elevated interest payments, have constrained spending on human capital and social protection. Inflation has been historically high, and has soared further to 33.8 percent in 2023 from 13.8 percent in 2022, and labor market participation has been declining, particularly for women. The severe global shocks, in particular the Russian invasion of Ukraine, global monetary tightening, and more recently the Middle East conflict have aggravated these pre-existing imbalances.

Despite these challenges, Egypt's medium-term macroeconomic outlook is expected to improve as the country pushes ahead with stabilization and structural reforms. Economic activity is forecast to drop to 2.8 percent in FY24 (from 3.8 percent a year earlier) but is projected to start recovering in FY25-FY26, supported by investments and a rebound in private consumption as inflation decreases. Government debt is expected to rise in the short term but decrease over the medium term with fiscal consolidation. Pursuing the ambitious reforms under the State Ownership Policy as well as ameliorating the business environment are essential for fiscal space, human capital development and social protection, and private sector growth and job-creation.

Last Updated: Apr 17, 2024

ľ¹ÏÓ°Ôº Group¡¯s  lays out the World Bank¡¯s strategy in the country for FY2023¨C2027. 

The new CPF aligns with the Government of Egypt¡¯s Sustainable Development Strategy, ¡°Egypt Vision 2030,¡± and the National Climate Change Strategy 2050.

The CPF builds upon a comprehensive set of World Bank analytics, including , , and .

The CPF works towards three high-level outcomes:

1. More and better private sector jobs: through supporting the creation of an empowering environment for private sector-led investments and job opportunities as well as creating a level playing field for the private sector.
2. Enhanced human capital outcomes: through supporting the provision of inclusive, equitable and improved health and education services as well as effective social protection programs.
3. Improved resilience to shocks: through strengthened macroeconomic management, and climate change adaptation and mitigation measures.

The CPF also aims to strengthen Egypt¡¯s role in regional integration through enhanced regional trade and greater connectivity in infrastructure, transport, energy, and labor. Through the CPF the World Bank will also continue to support Egypt¡¯s ambitions to be a leader for the climate mitigation and adaptation agenda in the region, following its presidency of COP27.

Additionally, the CPF integrates two cross-cutting themes¡ªgovernance and citizen engagement, and women¡¯s empowerment¡ª across programs.

The CPF will be implemented jointly by the World Bank, the International Finance Corporation (IFC, a member of the World Bank Group), and the Multilateral Investment Guarantee Agency (MIGA, a member of the World Bank Group), building on the three institutions¡¯ current portfolios and adopting a flexible approach to lending. The CPF will be supported through a financial envelope of US$7 billion in lending (US$1 billion per year from IBRD and about US$2 billion during the entire CPF period from IFC), in addition to guarantees from MIGA. Partnerships remain a crucial component of the strategy.

Last Updated: Apr 17, 2024

ľ¹ÏÓ°Ôº supports Egypt¡¯s development through lending, analytical work and advisory services with a focus on strengthening human capital, improving service delivery, building the country¡¯s resilience to shocks, and addressing climate change, as well as the impacts of macroeconomic shocks. Current projects include: 

• The Bank has supported the government in designing and scaling up social safety net programs under (US$900 million, including ).   As of December 2023, the program had reached about 5.3 million households (around 22 million citizens): 4.67 million households under the operation, including remaining beneficiaries transferred to TKP from the old Daman, and 600,000 households covered by the National Coalition for Community Development Work.   Thanks to its adaptive shock responsive social registry and strong delivery system, the program efficiently expanded its coverage in recent years in response to consecutive crises such as the COVID-19 pandemic, the repercussions of the war in Ukraine, and the devaluation of the Egyptian pound, while the benefits provided increased by 55 percent between March 2023 and February 2024. The project piloted productive inclusion and graduation models in eight governorates under the "FORSA" program, to support the transition from protection to production and link beneficiaries to economic opportunities through asset transfer, wage employment, and training, with a focus on women and youth; 26,321 beneficiaries received self-employment and wage employment packages under this pilot.  A new US$500 million loan under the ¡°¡± became effective on 13 December 2023 to continue to support efforts to increase coverage and effectiveness of the Takaful and Karama Cash Transfer program, expand its social registry to support effective targeting of social protection programs, and enhance access of the poor and vulnerable to economic inclusion opportunities.
• (US$500 million) is improving local government capacity for quality infrastructure and service delivery to citizens and local firms in four of Egypt¡¯s poorest governorates, Qena, Sohag, Minya and Assiut, which have a combined population of around twenty million inhabitants. Citizens in 20 cities, 400 villages and 2970 hamlets have benefited from the expansion and improvement of municipal services and infrastructure. This includes water and sanitation, local markets, vocational areas, local roads, public spaces, and solid waste management. More than 47,000 businesses have benefited from upgraded infrastructure in zones and/or from the implementation of Cluster Action Plans and/or upgraded Government to Business  services in Program Governorates and developing 14 clusters focusing on handicrafts, agribusiness, and other endogenous clusters in Upper Egypt with an average of 85% level of satisfaction.  5.6 million citizens, 48% of them women, have benefitted from 4,161 completed infrastructure projects in the program. The program has been following performance grants to incentivize the performance of the governorates under different technical areas such as asset management, own-source revenues, participatory capital investment planning along with cross-cutting themes (fiduciary and social & environmental safeguards). The Upper Egypt Local Development Program exerted considerable efforts towards replicating and scaling up its best practices and reforms not only to the rest of the Upper Egypt governorates but also to the other 27 governorates across the country.
•  's (US$500million) completion of the emergency response measures played a crucial role in addressing the country¡¯s shortfall in wheat imports and ensuring the Bread Subsidy Program's uninterrupted operation for the benefit of the poor and vulnerable. The procurement of approximately 1.1 million metric tons of wheat was achieved through a series of competitive tenders, reflecting a commitment to efficiency and timeliness. In collaboration with the Ministry of Agriculture and Land Reclamation, progress is being made in seed improvement and capacity enhancement at the Sakha Agricultural Research station. The national agro-meteorological network is poised for expansion with the addition of 10 new observation points, which will bolster the provision of weather-related information to farmers. The upgrading of 10 agricultural service centers is also underway, aiming to augment the dissemination of training and agricultural knowledge.
•  (US$850 million, with US$300 million co-financing from the Asian Infrastructure Investment Bank), aims to bring sanitation to about 1.73 million people in highly polluted villages and satellite areas of Sharkia, Dakahliya, Beheira, Menoufia, Damietta and Gharbia governorates in the Nile Delta, through household connections and wastewater treatment facilities. The program empowers and incentivizes local water and sanitation companies (WSCs) to deliver effective, inclusive and accountable decentralized services. It is laying the groundwork for sustainable development of the sector by supporting the development of its water and sanitation sector strategy, implementation of information systems, and supporting regulatory and tariff reforms. The Parent program closed on December 31, 2023, achieving the target of 167,000 household connections. Under Result Area 2: Improved operational systems and practices of water utilities, Performance Improvement Action Plans covering twelve Key Performance Indicators were consistently achieved by the three WSCs. There has been good progress on the sector reform agenda in the following areas: (i) wider adoption of the standard operating procedures (SOP) for land, through an inter-ministerial Memorandum of Understanding; (ii) issuing of a decree for the adoption of a unified information system; (iii) issuing of a decree for the development of a financial model for sustainable cost recovery; (iv)  use of the International Benchmarking Network for Water and Sanitation Utilities as the Water and Sanitation Sector¡¯s information system for monitoring sector progress; and (v) approval of the business plan and SOPs for Egyptian Water Regulatory Authority. Good progress has also been made on the development of the National Water and Sanitation Sector Strategy; a draft version is under discussion with stakeholders in the sector.

• (US$1 billion, including Additional Finance) aims to improve the affordability of formal housing for low-income households in Egypt and to strengthen the Social Housing and Mortgage Finance Fund¡¯s capacity to design policies and coordinate programs in the social housing sector. The program is a top priority for the Egyptian authorities, with a 63% disbursement ratio. Since program inception, over 530,000 subsidies have been delivered to low-income households across Egypt¡¯s 27 governorates.  This has contributed to greater social and youth inclusion: Over 23% of the beneficiaries are women, 70% are below the age of 40 and 18% are below the age of 30. In addition, 65% of beneficiaries are first time borrowers, having never engaged with a financial institution prior to the initiation of this program. The program is also piloting the inclusion of green building initiatives in social housing, with the aim of certifying 55,000 units as ¡®green¡¯ under national and international certification standards.

• The  (US$50 million) was approved in May 2020 and closed on August 30, 2023 with 100 percent disbursement. It focused on immediate operational challenges and areas identified as critical gaps in Egypt¡¯s national response to the pandemic. Project funds complemented the activities of Egypt¡¯s COVID-19 plan by supporting costs associated with: (i) procuring and distributing medical equipment, including ICU and laboratory testing equipment and supplies, infection control products and PPE; (ii) ¡°Corona incentive pay¡± for healthcare personnel undertaking COVID-19 related tasks; (iii) health worker training; and (iv) operation of designated quarantine, isolation, and treatment centers. The closing date was extended by 14 months to account for prolonged delay in project effectiveness and to allow for enough time to complete procurement activities amid global supply chain disruptions and national challenges in supplying foreign currency.

•  (US$530 million) is designed to enhance healthcare services and address public health challenges in Egypt. Its objectives include improving healthcare service quality, boosting demand for health and family planning services, combating Hepatitis C, and providing a rapid response to crises or emergencies. Notably, the project backed the "100 Million Healthy Lives" campaign, which screened over 53 million individuals for Hepatitis C and other noncommunicable diseases, leading to the treatment of approximately 1.2 million Hepatitis C patients. Initiatives such as the National Community Health Worker Campaign, the Al Wissam Initiative, and the Visiting Doctors Program have been instrumental in raising the national contraceptive prevalence rate from 58% in 2018 to 66% in 2022. In December 2023, the project was restructured to extend its closing date by two years to December 2025 and reallocate funds towards the Presidential Initiative aimed at eliminating surgical waiting lists. Additionally, it responded to a government request to activate the Contingent Emergency Response Component, allowing for the expedited use of US$90 million for medical supplies and equipment to replenish stocks affected by the crisis in Gaza.

• The  (US$400 million) was approved in June 2020. The project supports Egypt to implement the new UHIS, as envisioned in the Universal Health Insurance Law passed in 2018. This includes Phase I of its rollout in six governorates: Port Said, Suez, Ismailia, South Sinai, Luxor and Aswan. The governorates are home to about six million people, close to 6% of Egypt¡¯s total population.  As of January 2024, the program has been rolled out in four of the six Phase 1 governorates, enrolling over 3.1 million people, inclusive of over half a million vulnerable and poor population benefiting from Government subsidy on the UHIS program. A national quality accreditation standard has also been developed, and is being implemented, with over 140 public providers accredited and contracted to provide services.  

• In April 2019, the World Bank approved the  (US$200 million) which aims to create jobs and improve economic opportunities for Egyptians, with a focus on women and youth. This project provides a comprehensive package of financial (debt financing and equity investments) and nonfinancial support to traditional Micro, Small and Medium Enterprises, innovative startups, and high growth firms. It went into effect in January 2020. To date, the project has maintained and created more than 408,829 jobs and supported more than 199,619 beneficiaries ¡ª of whom 43% are women and 43% are youths. 

• The  (US$500 million) supports a major government effort to improve teaching and learning conditions in public schools, with a focus on: (i) improving the quality of kindergarten (KG) education; (ii) enhancing the capacity of teachers, supervisors, and educational leaders, and monitoring their teaching, mentoring, and leadership practices; (iii) the intensive use of education technology including alternative resources for teaching and learning; and (iv) the introduction of new, higher order thinking skills-driven secondary examinations, governing access to universities, as well as national assessments in grades 4 and 7. To improve school readiness, the project supported the Ministry of Education and Technical Education (MOETE) in developing a new quality assurance system for KG. The ministry has also administered baseline data collection to guide quality enhancement plans in an initial phase of 35 percent of KG. This is in addition to developing and accrediting new KG teacher training modules driven by KG diagnostic studies to improve KG teaching practices. In the area of student assessment, the MOETE developed and administered a new secondary examination system nationwide, driven by higher order thinking skills, and deployed the new item test bank and scoring software since the grade 10 cohort of 2018/2019.  To improve the ministry¡¯s ability to track student learning in early grades, the MOETE developed and administered the grade 4 national assessment for literacy and numeracy twice; and the results of the 2021 and 2023 test are published on the ministry¡¯s website. This is in addition to developing and administering a similar national assessment in grade 7, also focusing on Arabic and mathematics. To enhance teaching and learning ¨C more broadly ¨C the MOETE has developed performance standards for teachers, and also developed and made available curated resources through digital and TV educational channels to students and teachers in grades 4-12. The project also supports a high frequency pulse survey to guide strategic communication planning, drawing on stakeholders¡¯ views and perceptions of reform activities as well as monitor access and usage of alternative learning resources.

• (US$440 million) was approved in March 2021, complemented by a US$241 million contribution from the Egypt National Railway (ENR) network. The project will modernize the railway signaling along the Alexandria-Cairo-Nag Hammadi corridor of the ENR and help improve safety at select stations and junctions using a safe systems approach, which will include gender, citizen engagement and disability considerations. The project will introduce reforms, using performance-based funding, in accordance with best international practice, to support ENR to deliver high quality services at a lower cost through the adoption of public service obligation and multi-annual infrastructure contracts. An estimated 1.4 million daily users of the railways will be able to rely on a safer and more reliable service. 

• The (US$400 million) was approved in September 2022, complemented by a US$ 598 million contribution from the Egypt National Railway (ENR) network.  The project will improve the performance and support the decarbonization of the logistics and transport sectors in the Alexandria¨C6th October¨CGreater Cairo Area railway corridor. The project includes developing and adopting a transparent railway Infrastructure Access Charging scheme for the Egyptian railway network to attract private sector participation; developing a regulatory framework including identifying the detailed scope and responsibilities of a railway regulator and the associated governance framework; and identifying and developing additional rail©\friendly policies to increase traffic on the railway network.

• The (US$200 million) was approved in September 2020 and became effective on June 9, 2021. The prime minister witnessed the signature of the inter-ministerial agreement establishing the terms of partnership between implementing agencies. The project will contribute to reducing air pollution and climate change emissions in Greater Cairo. Activities are focused on building responsiveness and resilience into institutions and systems, with an emphasis on the waste sector (treating and minimizing contaminated waste and establishing properly managed final disposal facilities) and reducing air and climate emissions from the public transport sector. The project aims to support an integrated climate and air quality management plan for Greater Cairo, the construction of an integrated waste management facility and the financing of a demonstration low/no emission e-bus transport fleet and activities related to running it. These are expected to reduce the burden of air pollution on health and on the economy.   

Last Updated: Apr 17, 2024