Egypt Struggles to Meet Job Creation Needs

Egypt faces a significant challenge in creating employment opportunities for its growing workforce. The country requires around 1.3 million jobs every year to keep pace with its expanding workforce. However, over the past two decades, Egypt has only managed to create an average of 600,000 jobs annually. This shortfall has severe implications for the country's economic growth and development.

The World Bank has emphasized the need for Egypt to mobilize private capital to support job creation and economic growth. According to Alwaleed Fareed Alatabani, Division Director for Egypt, Yemen, and Djibouti at the World Bank, "Job creation in Egypt will depend not only on how much capital is available, but on where it flows." The World Bank Group has been working with Egypt to attract investment and support the creation of more and better jobs.

The World Bank Group's efforts to support Egypt's development priorities include private capital mobilization. This involves strengthening policies and regulations, improving markets, reducing risks, and connecting private capital with viable investment opportunities. The International Finance Corporation (IFC) invests directly alongside businesses and mobilizes additional private financing. Since fiscal year 2022, the World Bank Group has helped mobilize nearly $6.7 billion in private capital for Egypt.

One area where private capital mobilization has had a significant impact is in Egypt's housing sector. The World Bank has worked with the Egyptian government to broaden access to affordable homeownership. A $1 billion loan from the World Bank has enabled the government to offer down payment support subsidies, making it possible for lower-income families to purchase homes. The program has helped nearly 750,000 families acquire homes and generated an estimated 3.8 million jobs.

The IFC is also supporting businesses in Egypt by providing financing to help them invest, expand, and create jobs. For example, the IFC is supporting Abu Dhabi Ports Group to build a new terminal at Safaga on the Red Sea. The project is expected to handle around 450,000 containers a year and create economic opportunities for Egyptians linked to the movement of goods and trade.

Reducing risk is also a critical factor in unlocking investment in Egypt. The Multilateral Investment Guarantee Agency (MIGA) provides guarantees against certain political and non-commercial risks, giving investors greater confidence to commit capital to projects that support development. MIGA's guarantee of Scatec's green bond refinancing of its solar projects in Egypt mobilized over $100 million in private capital.

The World Bank Group's efforts to support Egypt's development priorities are ongoing. With a focus on mobilizing private capital and creating jobs, the organization is working to help Egypt address its significant employment challenges. Key initiatives include supporting the growth of the private sector, improving access to financing, and reducing risk.

Key points

• Egypt needs to create around 1.3 million jobs every year to keep pace with its growing workforce.
• The World Bank Group has helped mobilize nearly $6.7 billion in private capital for Egypt since fiscal year 2022.
• The housing sector program has helped nearly 750,000 families acquire homes and generated an estimated 3.8 million jobs.