The African Development Bank (AfDB) has approved a $170 million loan to support Egypt’s ongoing efforts to foster private sector growth, economic diversification, and green transition. This funding, announced in November 2024, represents Phase II of the Support Programme for Private Sector Development and Economic Diversification (2024-2025).
The initiative aims to improve Egypt’s business environment, promote renewable energy, and support small and medium-sized enterprises (SMEs), particularly those led by women and young entrepreneurs. The programme also aims to boost economic resilience by increasing investment in key sectors like manufacturing and agribusiness, while advancing green growth through eco-friendly industrial practices.
Key Aspects of Phase II
Building on the success of Phase I, which received $131 million from AfDB alongside contributions from Korea’s Economic Cooperation Development Fund (EDCF) and the Japan International Cooperation Agency (JICA), Phase II will be co-financed by the World Bank. This partnership reflects a strong international commitment to Egypt’s economic transformation.
Notable components of Phase II include:
- Legalizing Informal Businesses: Streamlining the process for informal enterprises to transition into the formal sector.
- Supporting SMEs: Improving legal frameworks for quick settlement of small claims and better legal protections for SMEs.
- Gender Inclusion: Empowering women-led businesses through enhanced access to markets and legal safeguards.
Focus on Green Growth and Economic Diversification
A key priority of the programme is advancing Egypt’s green transition. This includes increasing investments in renewable energy, promoting sustainable industrial practices, and creating policies to reduce carbon emissions. These initiatives align with Egypt’s commitment to global sustainability and climate change mitigation.
Abdourhamane Diaw, Head of AfDB’s Egypt Country Office, expressed confidence in Egypt’s economic potential: “Egypt’s youthful population, improving competitiveness, and the private sector’s potential provide ample reasons for optimism. The Egyptian economy is on track for stronger, greener, and more sustainable growth,” he stated.
Support for Women and Youth
There is also a special focus on empowering women and youth through:
- Access to Finance: Providing women entrepreneurs with greater access to funding and training.
- Youth Employment: Creating opportunities through skills development and entrepreneurship programs.
- Gender Equity: Encouraging women’s participation in traditionally male-dominated sectors such as manufacturing and energy.
Impact and Outlook
Phase I laid the groundwork for essential economic reforms and improved competitiveness. Phase II aims to deepen these reforms, attract greater investment, and bolster Egypt’s economic stability. The project’s focus on green growth, alongside its support for SMEs and marginalized groups, is expected to contribute significantly to Egypt’s long-term economic resilience.
