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Following UN Declaration of SMEs International Day, an Overview of the Expanding Sector in Egypt

14 May, 2017
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Youth represent 60% of Egypt’s ever-growing population, which is spilling over 90 million people, making it the Middle East’s most populated country. These statistics make it mandatory that local resources be developed, and that Cairo be turned into a regional center for attracting small- and medium-sized enterprises (SMEs).

The picture calls for the international community’s support for Egypt to give hope to the conflict-stricken region’s youth, stated Head of Egypt’s Administrative Control Authority Mohamed Erfan at a United Nations session on Friday. The session was dedicated to discussing how SMEs push forward achievement in the UN’s Sustainable Development Goals (SDGs).

Recognizing the importance of micro-, small- and medium-sized enterprises in achieving the new global development goals, the UN General Assembly designated June 27 as an international day for those actors. The decision came on April 7.

In a resolution adopted without a vote, the 193-member body also invited all stakeholders, including UN member states, UN entities and civil society organizations, to observe the day and raise public awareness of the contribution of SMEs to the 2030 Agenda for Sustainable Development, which the assembly adopted in September 2015.

Erfan declared that, by 2020, Egypt will aspire to a 9% annual growth for the sector, an increase of its local production to 25% and make available 3 million employment opportunities.

Among the efforts exerted for the sector and to support poor families are the direct loans to the small enterprises fund that total EGP 30 million, and the fund’s EGP 9 billion supported through banks and NGOs, which support 2.3 million microenterprises that provide 2.4 million job opportunities.

Egypt’s Local Development Ministry has also launched the Mashrou’ak (Your Project) initiative to initiate 46,000 projects that aim to provide 280,000 employment opportunities.

In addition, the Central Bank of Egypt allocated EGP 200 billion (around $11 billion) to support SMEs and microenterprises over the course of three years.

Erfan highlighted that President Abdel Fattah Al-Sisi has dubbed 2017 as the Year of Women, pointing out that the government has supported women as breadwinners with projects that total EGP 8 billion in expenditures.

The fifth of the UN’s SDGs discusses gender equality and women empowerment. Statistically, women are the main beneficiaries of SMEs, as they are usually responsible for the wellbeing of the family, stated Minister of International Cooperation and Investment Sahar Nasr, who also attended the UN session.

SMEs also relate to the first SDG, which aims to eradicate poverty, and the second one concerning food security, Nasr underscored, adding that in Egypt SMEs constitute 98% of all companies, 85% of private labor in non-agricultural sectors and 40% of all of the country’s labor force. 

During her visit, Nasr brought the UN’s attention to the new Investment Law, which Egypt has been cooking up for months and which greatly supports SMEs.

Nasr discussed some problems that SMEs face in Egypt, such as the ability of financial institutions to lend money, issues with funding from financial markets and the refusal of banks to fund SMEs, especially youth-related projects and new coming investors. 

The ministry has nevertheless supported SMEs, acquiring $600 million from the World Bank, $76 million from the United States Agency for International Development and $200 million from the Saudi Fund for Development to further its goals for the sector.

“Egypt is a promising market for investing in all sectors,” believes Erfan, highlighting how the country has embraced victims of war, notably from Iraq, Syria, Somalia and Sudan. He said that Syrians have established 4,100 companies in Egypt with $1.9 billion worth of capital, the products of which have invaded local and international markets under the slogan “Made by Syrian Hands on Egyptian Lands”, adding proof that Egypt provides a healthy environment for business and investment.


Photo credit: A worker in Old Cairo. By Aya Nader.

 

 

Tags SMEs United Nations sustainable development goals Sahar Nasr