INTERVIEW: Egypt has opportunity to strengthen competitiveness, integration into global economy - AfDB’s Blomberg

Ahram Online (excerpt: read  the full interview here.)

Africa's economic recovery process from the pandemic will mainly depend on the financial capacity of African countries in addressing immediate shocks, stabilising their  economies and investing in the growing back phase

Ahram Online:In light of the AfDB’s latest African economic outlook report, how is the COVID-19 pandemic expected to affect the continent’s economy during 2021 and 2022?

Malinne Blomberg:The negative impact on economies has been massive. Africa has been hit hard by the COVID-19 pandemic. Gross domestic product (GDP) in Africa contracted by 2.1 percent in 2020. In just one year, the continent lost five years' worth of gains in terms of economic development. We expect to have turned the corner and Africa’s economic growth rate is projected to recover to 3.4 percent in 2021.

AfDB’s greatest and most urgent goal is to save as many lives as possible; reverse the trends; protect livelihoods and put Africa’s economy back on more resilient recovery pathways. That’s why we put in place up to $10 billion in a crisis response facility to help African governments and the private sector deal with the impact of COVID-19.

The bank also launched a $3 billion 'Fight COVID-19 Social Bond' on global capital markets and provided $27 million to the Africa Center for Disease Control and Prevention. This so that they can take the lead in tackling the pandemic.

The economic recovery process from the pandemic will mainly depend on the financial capacity of African countries in addressing immediate shocks, stabilising their economies and investing in growing back. With the leverage of our AAA financial standing, the bank will continue to mobilise the funds Africa requires to cement the continent’s status as the world’s next business frontier.

AO:How do you see Egypt's economic performance amid the pandemic?

MB:Faced with the COVID-19 outbreak, the Egyptian economy has demonstrated great resilience and agility to a large extent. Thanks to the reforms undertaken since 2016 to stabilise the economy.

The national economy, which expanded by 3.6 percent in 2020, was one of the few in Africa that posted positive growth for the year. Indeed, Egypt has weathered the crisis well due to its macroeconomic stabilisation and recent efforts to enhance health, education and economic diversification outcomes.

Meanwhile, the pandemic has accentuated pre-existing vulnerabilities in many economies across the globe, undoing significant progress made in recent years. Egypt’s economy has also been deeply affected, with trade and supply chains disrupted, tourism and other industries were hit hard.

Egypt’s youthful and educated population, its growing competitiveness and the potential of its private sector give us reason to be confident that the country can overcome the COVID-19 crisis. To achieve this potential, we anticipate that a second wave of bold economic reforms will be implemented, to a large extent focusing on the business environment, which in turn will create more job opportunities.

AO:How does the AfDB see the role Egypt plays on the continent, especially in economic and trade areas?

MB:Egypt is playing a key role in Africa, with its economy being more and more integrated within the continent. All whilst focusing on a swift and sustainable recovery. Egypt also has an opportunity to strengthen its competitiveness and integration into the global economy, which remains essential for longer-term growth. Considering that Africa is one of the fastest-growing regions in the world, further integrating with other African countries makes a strong business sense. The Bank’s support to regional integration includes assessing the skills needed for tomorrow’s jobs in the Suez Canal Economic Zone, with the aim of contributing to securing a suitable workforce for those investing in the zone.

Furthermore, as many world economies turn inward, we see great potential for closer African integration over the medium term. Despite huge trade and investment opportunities in the region, intra-regional trade in North Africa is among the lowest of any world region (below five percent) and represents an opportunity in itself.