25 April 2024 12:00 AM

Egypt-World Bank Country Partnership Framework FY2023-2027

Sunday، 07 May 2023 - 12:00 AM

Prime Minister Dr. Mostafa Madbouly attended on Sunday 07-05-2023, the activities of the conference launching the new Country Partnership Framework (CPF) between the Arab Republic of Egypt and the World Bank Group (WBG) for FY2023–2027.
The launching ceremony also witnessed the participation of Ferid Belhaj, Vice President of the World Bank Group for the Middle East and North Africa (MENA), and Marina Wes, Country Director for Egypt, Yemen and Djibouti at the World Bank Group, heads of international financing institutions affiliated to the World Bank Group, and a number of ministers representing the government.

The CPF will be supported through a financial envelope worth $7 billion, in loans of $1 billion per year from the International Bank for Reconstruction and Development (IBRD) and about $2 billion from the International Finance Corporation (IFC) during the entire CPF period and guarantees from the Multilateral Investment Guarantee Agency (MIGA).

Moreover, the CPF builds upon a robust set of WBG analytics, including the Systematic Country Diagnostic, the Country Private Sector Diagnostic and the Country Climate and Development Report.

The new CPF aligns with the government of Egypt’s Sustainable Development Strategy, “Egypt Vision 2030,” and the country’s National Climate Change Strategy (NCCS) 2050.

Introduction

Egypt’s macroeconomy has shown relative resilience in recent years, largely due to structural reforms implemented since 2016 including consolidation and a major energy reform program to address subsidies and to boost electricity and gas supplies. Initiatives and new laws were adopted to begin to address long-standing structural challenges, including in the business environment. Economic reforms were coupled with social protection and human development initiatives to provide support for poor and vulnerable groups, while starting to tackle challenges in health and education. In light of this first wave of reforms, Egypt was one of the few countries to maintain positive economic growth during the COVID-19 pandemic.

Structural challenges and macro-economic vulnerabilities, exacerbated by external shocks such as the pandemic, regional geopolitical conflicts, and climate change threats, underscore the call for a second wave of reforms. Structural reforms, building long-term macroeconomic resilience and continuous strengthening of Egypt’s human capital aspects are necessary to preserve the gains of the first wave, while achieving Egypt’s ambitious economic development and inclusion goals.

Recognizing these urgent development needs, Egypt has started a second wave of reforms, including the launch of the Hayat Karima national development initiative, the expansion of Takaful and Karama poverty-targeted cash transfer program, development of informal settlement areas, an education reform program, and ongoing efforts to expand the accessibility and quality of health services through the newly introduced Universal Health Insurance System. Committing to the climate agenda, Egypt has also launched the 2050 National Climate Change Strategy, followed by the Nexus of Food, Water and Energy (NWFE) initiative. Several fiscal and monetary measures were taken to mitigate and adjust to the macro-economic challenges.

The World Bank Group aims to support Egypt at this inflection point of its developmental journey through the new FY2023-2027 Country Partnership Framework (CPF).

The CPF will be implemented jointly by the World Bank, IFC, and MIGA, building on the current portfolios and adopting a flexible approach to financing operations, with a financial envelope of US$7 billion (US$1 billion per year from IBRD and about $2 billion during the entire CPF period from IFC) for financing operations during the CPF period, in addition to guarantees from MIGA.

About the CPF

The CPF seeks to create conditions for green, resilient, and inclusive development. It puts the people of Egypt at the centre of the strategy in pursuit of three high-level outcomes (HLOs): (1) more and better private sector jobs; (2) enhanced human capital outcomes; and (3) improved resilience to shocks. In addition, the CPF outlines two cross-cutting themes—governance and citizen engagement, and women’s empowerment—that underpin progress toward the HLOs and complement and reinforce each other. Efforts to engage citizens and enhance the voice of stakeholders will be a cornerstone of the World Bank Group’s work in Egypt.

CPF Objectives

Through this framework the World Bank Group aims to:

- Leverage the momentum of the country’s private sector mobilization program and state ownership policy to expand private sector participation in the economy and assist in operationalizing private sector and investment climate reforms.

- Guide Egypt’s efforts to improving citizen service delivery (social housing, water and sanitation, household gas connections and transportation).

- Ensure effective implementation of education, health, and social safety net reforms, including the expansion of the Universal Healthcare System and the Takaful and Karama Program to provide coverage to more areas and larger populations, especially the poor and vulnerable.

- Support the government’s efforts to boost resilience and to withstand future economic and climate shocks.

- Support implementing recommendations of the recently completed Country Climate Development Report which was prepared with strong government ownership and launched at COP27 in Sharm el-Sheikh.

- Empower Egypt’s renewable energy sector and reforms as a key enabler of strategic initiatives critical to Egypt’s green transition and positioning as a green energy hub.

- Strengthen Egypt’s role in regional integration, which is critical for Egypt’s growth through enhanced regional trade and greater connectivity in infrastructure, transport, energy, and labour.

Furthermore, the CPF aims to integrate two cross-cutting themes, “governance and citizen engagement and women’s empowerment”, across their programmes.

Activities

Prime Minister Moustafa Madbouli delivered a speech during the conference, welcoming all attendees, and saluting the various parties related to development work and international cooperation, which seek as serious and active partners to present Egypt as a pioneering development model that puts the population of this great country – with all its spectrum, including immigrants, refugees, and asylum seekers - at the center of attention in all its development programs and projects.

The Prime Minister affirmed his keenness to participate in the launching ceremony of the new Country Partnership Framework (CPF) between the Arab Republic of Egypt and the World Bank Group (WBG) for FY2023–2027, Which is always characterized by transparency, effectiveness, and shared responsibility.

The Prime Minister also appreciated the pivotal role played by the World Bank Group, as well as other financing institutions, to achieve sustainable, just and comprehensive development, and to support the reform policies and programs adopted by the Egyptian government.

He expressed his aspiration to develop and implement cooperation with the World Bank Group in a manner that is consistent with the actual needs as well as the Egyptian national requirements to support the Egyptian economy towards green transition, linking between development and climate action, through comprehensive industrial and agricultural development, promotion of investment in human capital, and development of the Egyptian countryside.

He referred to what Egypt and the countries all over the world suffer from many complex and successive crises globally and regionally, whose negative effects were reflected and multiplied on the international economic situation, and severely affected the regional and local environment, which prolongs the recovery period from those effects, especially in light of the unprecedented rises in energy and food prices worldwide.

He stated that the economic reforms implemented by the Egyptian state since 2016, in addition to the size of the achievement achieved in maximizing state assets and developing infrastructure, have contributed significantly to dealing with the effects of these global crises and supporting efforts to contain and mitigate their consequences, adding that the social protection measures taken have contributed in providing a safe cover for the most affected groups.

Dr. Moustafa Madbouli stressed the Egyptian government's keenness to maximize the benefit from the various international partnerships, and to achieve integration among financial resources offered by development partners.

He explained that the new Country Partnership Framework (CPF) between the Arab Republic of Egypt and the World Bank Group (WBG) for FY2023–2027 aims to support Egypt in building paths to eradicate poverty, promote comprehensive prosperity for all groups of society, improve the standard of living for the most needy groups, and create conditions conducive to achieving comprehensive green development.

Prime Minister Moustafa Madbouli commended the pivotal role of the World Bank Group and other financial institutions to attain sustainable development and support policies and reform programs.

He concluded his speech expressing the Egyptian state's hope to see a remarkable development in the developmental role played by the World Bank Group at the regional level, looking forward to sharing Egyptian development expertise and pioneering experiences to support the efforts of the Bank and the continent's development partners in Africa, in line with development cooperation strategies between Egypt. and development partners, saying: "We are confident that Egypt is able to become a center for this expansion, and to develop regional integration programs by promoting investment throughout the continent."


For her part, Dr. Rania A. Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank Group, delivered a speech during the launching ceremony of the new Country Partnership Framework (CPF) between the Arab Republic of Egypt and the World Bank Group for FY2023–2027.

H.E. Dr. Rania A. Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank Group, said that Egypt has long standing historical relations with the World Bank, as it is considered one of the founding countries of the Bank since 1945. Over the decades, development cooperation relations between Egypt and the World Bank Group has grown until the World Bank has become one of the most important multilateral development partners in Egypt, as well as its consistent and effective contribution to supporting national development priorities in various fields.

The Minister stated that the World Bank, since the beginning of its relationship with Egypt, has contributed to financing more than 175 projects in various governorates, worth over $25 billion, pointing out that the joint relations are not limited only to development cooperation, but that Egyptian expertise has also enriched the Bank's work. Since its establishment, to support development efforts at the international and regional levels, they held high-level positions in the Bank and its subsidiaries and participated directly in the development of the World Bank Group in terms of institutional and operational aspects where they participated directly in the institutional and operational development of the Bank. Perhaps the most prominent of these names is the Egyptian thinker, jurist, and economist, scholar Dr. Ibrahim Shehata, who held the position of First Vice President of the World Bank from 1983 to 1998.

Al-Mashat explained that the joint efforts between Egypt and the World Bank Group are moving forward until today, as Egypt is actively participating  in the evolution  roadmap to stimulate and develop the World Bank Group's activity to build resilience and support development and growth efforts in order to develop more effective solutions, end poverty, and promote shared prosperity through  sustainable, resilient and inclusive development, in line with the Bank's main message, and these efforts coincide with the appointment of Dr. Ajay Banga, the new President of the World Bank Group.

The Minister of International Cooperation congratulated the new president of the World Bank Group, affirming Egypt's support for his new mission, with the importance of emphasizing the need to strengthen the role of the Bank to address the growing and accelerating challenges facing middle-income countries and reduce the burdens on developing and least developed countries.

Strategic Partnership Framework between Egypt & the World Bank

Al-Mashat noted that the framework of the CPF with the World Bank Group represents a new value for establishing means of development cooperation during the next five years, in line with the national priorities represented in Egypt’s Vision 2030, the government action program, Egypt's National Structural Reform Programme, and the National Country  Climate Strategy  2050, the National Family Development Project and the National Strategy for the Empowerment of Egyptian Women, in addition to the presidential initiatives, especially the “Haya Karima” initiative, to achieve sustainable and comprehensive development that is able to withstand various crises and challenges, and to improve the standard of living for citizens, including migrants, refugees and asylum seekers, accelerating the pace of recovery and building back better post the COVID-19 pandemic, as well as overcoming the repercussions of the Russian-Ukrainian crisis and other successive challenges.

H.E. noted that the new partnership framework places the citizen at the core  by striving to achieve 3 main objectives, which are: More and better private sector jobs: through supporting the creation of an empowering environment for private sector-led investments and job opportunities as well as creating a level playing field for the private sector; Enhanced human capital outcomes: through supporting the provision of inclusive, equitable and improved health and education services as well as effective social protection programs; and Improved resilience to shocks: through strengthened macroeconomic management, and climate change adaptation and mitigation measures.

Inclusive Cooperation 

Al-Mashat stressed that the Ministry of International Cooperation was keen, during the preparation of the new framework, to enhance the participation of the various national entities, in addition to the relevant stakeholders from the private sector, civil society, academics and intellectuals, in formulating and preparing the country strategy in cooperation with the technical team of the World Bank Group. This was with the aim of maximizing country ownership and the joint responsibility of all stakeholders, and the results and recommendations of the evaluation and follow-up work of the programs and projects that were implemented within the framework of the previous strategy; all taken into consideration and in accordance with the principles of the Global Partnership for Effective Development Cooperation (GPEDC), which is based on the following country ownership, focus on results,  inclusive partnerships, transparency and mutual accountability.

Ongoing Partnerships

Al-Mashat reviewed the ongoing development cooperation portfolio with the World Bank Group, which includes 15 projects in various sectors, including education, health, transportation, social solidarity, petroleum, housing, sanitation, food security, local development, and the environment, with a total value of about $7 billion, in addition to 23 projects for technical and advisory support and capacity building.

H.E. touched on some examples of implemented projects that had a great impact on development efforts, including the natural gas delivery project to homes, which directly contributed to extending the natural gas network to more than 11 governorates nationwide and benefited more than 15 million housing units, in addition to the program to enhance The social protection network (Takaful and Karama), the social housing project, the project to develop sanitation services in rural areas, the project to enhance railway safety and improve the level of service, in addition to the local development support project in Upper Egypt, the health system development program in Egypt, and the policy framework financing program development, the comprehensive health insurance system project, and other projects.

Enhancing Private Sector Participation

Al-Mashat's speech focused on the role played by the World Bank Group in developing the private sector, enhancing its role in the economy, and creating a stimulating environment that enables it to participate effectively in the context of achieving comprehensive and sustainable economic development, adding that the investment portfolio of the IFC, which is the  arm of Bank to finance the private sector, amounting to about $1.3 billion in many priority sectors, such as renewable energy, construction, financial sector, industry, education, and health.

The MIGA portfolio for the private sector amounts to about $480 million, including the recent guarantees to support the investments of Scatec International Company to implement several renewable energy projects in Egypt.

H.E. continued by saying that in the context of the Ministry of International Cooperation's keenness to achieve the national goals, the Ministry participated, in cooperation with all relevant national entities, in the launch of the World Bank Group for many diagnostic reports such as the Egyptian Systematic Country Diagnosis (SCD), the Country Private Sector Diagnostic (CPSD)  in Egypt in 2020, the Public Expenditure Review Report in Egypt for the human development sectors in 2022, and the World Bank launched the demographic report in cooperation with the Egyptian government in 2022.

Joint Collaboration During COP27 

Al-Mashat then moved on to talk about partnerships with the World Bank during COP27, noting that during Egypt's presidency of COP27 in Sharm El-Sheikh, Egypt's Climate and Development Report (CCDR) was launched, as the report refers to a series of measures at the policy level and providing opportunities for investment that, if implemented within 5 years, could lead to more efficient use of natural resources, reduce the effects of climate change, and enhance Egypt's ability to compete in global markets.

The Bank also contributes, along with development partners, to support a number of presidential initiatives that have been launched at the international level, such as the Sharm El-Sheikh Guidebook for Just Financing, with the aim of ensuring a balance between the historical responsibility of pledges to increase finance  directed to climate action, and ensuring just access to funds that take into account the demands and needs of countries, in addition to participation and cooperation within the framework of Egypt’s Country Platform  for the NWFE program, as the first platform adopted by the Egyptian government in the context of achieving the goals of the NCCS 2050. This presidential initiative received international support for its effective role in attracting development funds and blended financing tools that stimulate the participation of the private sector in climate business projects.

Al-Mashat, Minister of International Cooperation and Governor of Egypt at the World Bank Group, stressed the compatibility of the development cooperation strategy between the Arab Republic of Egypt and the World Bank Group with national goals and priorities, and keenness to build on the achievements made during the last period, based on economic reforms and national projects that have been implemented since. In 2016, in addition to the structural and legislative reforms approved by the government that stimulated the role of the private sector in development and enabled international financing institutions to contribute a greater role in financing the private sector, which resulted in the development of the national economy and the promotion of comprehensive and sustainable growth.

The Ministry of International Cooperation is always keen to ensure that strategies are formulated between Egypt and its bilateral and multilateral development partners according to a participatory and transparent approach that reflects the values of inclusivity, country  ownership and joint responsibility, explaining that the value of international cooperation and development financing is represented in the on-ground impact of the efforts it establishes and creates; to invest in people and in a prosperous future.

Marina Wes, the World Bank’s country director for Egypt, Yemen and Djibouti, said: “We are proud to continue our strategic partnership with Egypt, and we are committed to supporting ongoing efforts dedicated to improving the quality of life for Egyptians.”

She added saying: “This CPF supports Egypt’s efforts to build back better by creating green, resilient, and inclusive development conditions. It puts the Egyptian people at the centre of its strategy, with a heavy focus on job creation by improving the business environment and levelling the playing field.” 

Cheick-Oumar Sylla, the International Finance Corporation (IFC) regional director for North Africa and the Horn of Africa, said: “The private sector plays a critical role in supporting the development of a green, resilient, and inclusive economy. This Country Partnership Framework demonstrates that when the private sector grows, people have access to more and better jobs – which ultimately helps them lead better lives.” 


Ferid Belhaj, World Bank Vice President for Middle East and North Africa confirmed that the new partnership framework between Egypt and the World Bank Group is of great importance, especially in light of the delicate circumstance regarding the global economic conditions, which represents a strong signal of confidence in the Egyptian economy.

Belhaj said, during a conference on the launching of the new strategy between Egypt and the World Bank Group for the period from 2023-2027, that this participatory framework has several pillars, including giving a greater opportunity to the private sector, green growth axis, pointing out that Egypt has a pioneering role in renewable energy profile.

In this regard, he drew attention to the initiatives witnessed by the COP27 conference, hosted by Egypt, which are clearly in line with the global trend in this regard, noting that Egypt's presidency of this conference confirms Egypt's leadership in this file.

He also touched on the file of the role of women in the economy, indicating that Egypt is interested in this file, and with the support of the World Bank, stressing the bank's readiness to support in this context, in light of the urgent need to support the role of women in the labour market, which is an important challenge.


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