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Egypt’s government is creating jobs, so why is unemployment rising?

The total workforce in Egypt has seen a noteworthy expansion, now standing at around 31.956 million individuals, which marks a 3.2% increase.
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In the midst of Egypt's evolving economic landscape, a paradox emerges: the government's vigorous efforts to create jobs seem to be running parallel to a slight increase in unemployment rates. The latest data from the Central Agency for Public Mobilization and Statistics (CAPMAS) reveals a nuanced picture: a rise in the unemployment rate to 7.1% in the third quarter of 2023, a modest jump from 7% in the previous quarter. This increase, however, unfolds against a backdrop of significant job creation initiatives by the Egyptian government.

The total workforce in Egypt has seen a noteworthy expansion, now standing at around 31.956 million individuals, which marks a 3.2% increase from the previous quarter. This growth in workforce participation is a key indicator of a labor market in flux, adapting to new economic conditions and opportunities.

Despite this rise in workforce numbers, the discrepancy in employment rates between urban and rural areas, as well as between genders, remains a concern. Urban areas account for 13.928 million of the workforce, with rural regions having 18.028 million. The gender gap is also pronounced, with male workers significantly outnumbering their female counterparts.

The Egyptian government's response to these trends has been proactive and ambitious. Aiming to curb the rising unemployment, plans are afoot to create approximately 800,000 new jobs in the fiscal year 2023/2024, focusing on sectors like agriculture, construction, retail, and manufacturing. These efforts are in anticipation of a projected labor force increase and a potential rise in the unemployment rate to 7.6%.

Supporting these job creation initiatives is the National Strategy for Employment, spearheaded by the Ministry of Labour and Immigration. This strategic plan aims to align the job market's needs with the available workforce, thus reducing the unemployment rate. Furthermore, the strategy underscores the importance of human development and the activation of the private sector as pivotal in driving economic growth and job creation.

The question then arises: why is unemployment rising despite these aggressive job creation efforts? The answer lies in the dynamic nature of the labor market and the lag time often involved in the fruition of government policies and programs. The increase in the labor force also indicates more people are actively seeking employment, possibly due to improved economic conditions or higher expectations.

In conclusion, Egypt's current unemployment scenario, characterized by a slight increase, is being met with strategic and targeted responses from the government. This situation highlights the complexities of job market dynamics and the need for continued, focused efforts in job creation and economic development.