As Egypt’s budget deficit will not start decreasing before FY 2014/2015, and the country’s economic growth hopes are hanging by a bittersweet thread – a.k.a. the IMF-loan – it is time to find alternative and / or additional ways to stimulate development.
Panel from left to right: Heba AbdelLatif, Karim Helal, Atter Ezzat and Sami Khallaf– Photo by AEBA
In an attempt to woe Asian businessmen and bankers, the AEBA-discussion went under the name “Opportunities in Infrastructure Projects” and focused on the planned governmental projects, which shall be implemented by the private sector.
Speakers were Advisor and Head of the Public Debt Unit at the Ministry of Finance Mr. Sami Khallaf, Head of the PPP (Public-Private Partnership) Unit at the Ministry of Finance Mr. Atter Ezzat, and Director Head of Structured Finance at the Commercial International Bank (CIB) Mrs. Heba AbdelLatif. The discussion was moderated by Mr. Karim Helal, Chairman of AEBA.
Khallaf assured that Egypt’s expenditures grow much faster than its revenues, because only 5% of the expenditures are being invested in actual profitable projects. What remains of the budget goes to wages, subsidies and other expenses, that barely generate any revenue. The government is heavily depending on the IMF-loan, hoping the IMF’s trust will motivate foreign investors to come to Egypt – a point which very much concerned AbdelLatif, as she stated: “Why are we all trapping ourselves in the IMF-loan and budget-deficit box? There are other options.”
Currently, the government’s PPP-Unit (also called: PPP Supreme Committee) has eight to ten projects, which it plans to tender and implement in 2013, ranging from industry to transportation and even outsourcing.
Ezzat explained that PPPs are one of the main pillars of the Egyptian economic growth, as it “moves the market, adds to the GDP and stability”. He added: “The government should change its position from delivering services to regulating and monitoring services and projects. Today, the main investor in mega-projects is the government itself. We both know that it is not the best entity to manage projects, and that’s why the private sector needs to jump in.”
The PPP-Unit also plans to hold a summit end of March. Attending will be Prime Minister Hisham Kandil and several ministers, in order to present the projects and encourage the private sector to go aboard.
Stay tuned: Next week, Egypt Business Directory will publish the list of tenders that the PPP-Unit is planning to offer.