Egypt: Job Creation for Better Livelihoods

In early 2020, Egypt’s population passed the 100 million-mark. Citizens under the age of 40 are estimated to comprise over 70 % of the country’s population, and the country’s labor force reached over 30 million citizens. That makes job creation increasingly vital to sustainable and inclusive growth and to the improvement of Egyptians’ livelihoods – and to a stable, regionally integrated, and prosperous Egypt. 

About 97% of Egyptian enterprises today are micro. Micro, Small, and Medium Enterprises (MSMEs), as well as large private sector firms, are integral to the country’s ability to create jobs. The COVID-19 pandemic’s adverse effects on employment — which had decreased to 8% before the pandemic only to increase to 9.6% in the second quarter of 2020 — highlight the urgency of empowering entrepreneurs and private sector firms to enhance their competitiveness, flourish, and create more and better jobs. 

 “Job creation is a priority area in the World Bank’s support to Egypt,” said Marina Wes, World Bank Country Director for Egypt, Yemen and Djibouti. “Our support is offered through analytical and policy work, various funding operations as well as technical assistances. Those efforts are in line with the Bank’s extended Egypt Country Partnership Framework and MENA strategy, which highlight the importance of job creation – with a focus on youth – in creating an inclusive development model that caters to the region’s pressing needs.” she added.

The Bank’s ongoing support to Egypt’s job creation efforts include:

• The “Egypt Country Private Sector Diagnostic”: Fostering private sector-led growth is one of the country’s development goals. This recent World Bank Group report analyzes some of the challenges Egypt continues to face and highlights opportunities for private investment and job-creating growth if a more dynamic business environment can be established. The report identifies trade and logistics, the role of the State, competition, and commercial justice as critical areas in need of reform. It also assesses some of the key sectors such as Agribusiness, Manufacturing, and Information and Communication Technology (ICT) that represent significant opportunities for growth and expansion. Global evidence suggests that these sectors can have significant impacts on an economy’s employment and exports. 

• The “Promoting Innovation for Inclusive Financial Access” operation: Throughout its life time (April 2014- December 2019), the project benefitted over 170,000 Egyptian entrepreneurs through the provision of micro and small loans through intermediaries, whether Banks or Non-Banks such as NGOs and leasing companies. Of the project’s total 174,588 beneficiaries, 42% were women, 44% were youth, and 40% lived in underserved regions. The project created 302, 937 jobs. 

• The ‘’Catalyzing entrepreneurship for job creation’’ operation: Building on the success of the “Promoting Innovation for Inclusive Financial Access” operation, this new nationwide operation – launched in 2020 – aims to provide a comprehensive package of financial and non-financial support  to traditional MSMEs and high-growth startups with a special focus on underserved groups, namely women and youth. In addition to focusing on women and youth beneficiaries, this operation also promotes private sector economic participation through its equity investment component. As of November 2020, the operation created 2,114 jobs, it aims to create 100,000 jobs by 2025.

• The “Strengthening Social  Safety Nets” operation: In efforts to promote productive inclusion and avoid dependency on cash transfers, the Takaful and Karama program, which is supported by the World Bank’s ‘’Strengthening Social Safety Nets’’ operation, is launching the ‘’Forsa’’ or opportunity program, which is being piloted in 8 governorates. FORSA offers opportunities for sustainable livelihoods through supporting wage employment as well as self-employment. Such support will enable beneficiaries to build financial independence and resilience. These activities will support the country’s ongoing women inclusion and empowerment efforts. The target of the project is reaching 25,000 to 30,000 individuals through different self-employment and wage employment models. Selection of participants will prioritize individuals to achieve targets of 50 % youth and 30 % women.

• The “Equal Access and Simplified Environment for Investment in Egypt” operation: Through simplifying licensing requirements and making industrial land allocation processes more transparent, this operation aims to increase private sector investments and, consequently, create more private sector jobs. The operation focuses on enhancing the role of Egypt’s General Authority for Foreign Investments as the main business entry point for investors and the one stop shop for providing certain licensing and permits activities to investors. This is being done through the developing a comprehensive and functional digital system to mainstream business procedures, which connect investor service centers at the central and subnational levels, facilitate easy access to the system in all geographical areas, and adopt international successful practices in the provision of government services.

“Jobs are integral to inclusive development and to citizens leading prosperous and productive lives. Accordingly, the World Bank remains committed to the ongoing support of Egypt’s job generation endeavors in efforts to contribute to the creation of a promising and prosperous future for Egyptian youth.” said Wes.