SMEs may be the key for a better Egyptian economy

Small- and medium-sized enterprises (SME) may be the best solution for Egypt’s poor economic state. SMEs have the ability to provide a large number of jobs to subdue unemployment and produce important products.

In May, the executive manager of the Egyptian Banking Institute (EBI) Mona El-Baradei said that the number of SMEs in Egypt constitutes approximately 2.5m projects, representing 99% of non-agricultural private sector projects. Moreover, these projects provide about 75% of jobs.

SME productions account for about 80% of the GDP and contribute to 75% of exports, El-Baradei said, adding that small businesses contribute to more than 10% of industrial production in Egypt, while medium enterprises provide 40%.

The government always says that increasing the number of SMEs is important, yet it has not quite changed its approach in providing grounds for entrepreneurs to start their own companies.

The Egyptian economy is facing many challenges: the high unemployment rate of 13%, the declining growth rates of 4%, and the domestic investment rates that stand at only 14.4% of GDP, next to the limited flow of foreign currency into Egypt.

SMEs could be the solution for the Egyptian economy, but that would require the government to pay attention.