Madbouly, private sector heavyweights discuss challenges, propose solutions

Private sector players, assemble: Prime Minister Moustafa Madbouly held a meeting with a number of prominent players in the local private sector yesterday (watch, runtime: 2:21:47). The two sides discussed the challenges facing the private sector and the measures private sector players want from the state in the years to come.

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In attendance: The meeting brought together big names in the private sector including: Sherif El Kholy, partner and head of Middle East and Africa at Actis, Palm Hills Chairman Yassin Mansour, Ezz Steel’s Ahmed Ezz, Elsewedy Electric CEO Ahmed Elsewedy, Hisham Talaat Moustafa, CEO and Managing Director of Talaat Moustafa, AlDau Chairman, Bassel Sami Saad, Microsoft Egypt General Manager Mirna Arif, and Hassan Heikal, founder of Kazyon and the former EFG Hermes CEO.

The challenges: “The private sector cannot bear the 32% interest rates for long,” Moustafa said. Ezz, meanwhile, touched on the topic of construction — “The state cannot build apartments and buildings on its own. This will flourish not only iron and cement factories, but furniture and appliances industries as well,” he said.

A push for more private sector involvement: Moustafa put forward a proposal to have the private sector manage every archaeological site in the country “in order to achieve the state’s tourism targets and in turn solve the FX crunch and see the Egyptian economy thriving.” Meanwhile, El Kholy proposed localizing the manufacturing of wind turbines used in wind farms.

What can we expect moving forward: Madbouly agreed with a proposal to form specialized sectoral groups to work alongside the cabinet, adding that the cabinet can start with forming groups for sectors at the top of its list of priorities ie. tourism.

Two mega tourism projects in the pipeline: “We are currently putting the final touches on two very large tourism projects with the aim of doubling hotel capacity in the area surrounding the Giza Pyramids, the Grand Egyptian Museum, and downtown,” Madbouly said.

And on the aviation front: Saad emphasized the need for a separation between the Civil Aviation Ministry and state-owned airlines to level the playing field in the sector, increase the number of tourists, and maximize the state’s FX revenues from the sector.

Remember: The government aims to attract some 25 mn tourists annually by 2030. To that end, it plans to add some 240-250k rooms to existing hotel room capacity. The finance and tourism ministries launched the EGP 50 bn subsidized loan program for hospitality players last month.

Also put forward: Heikal said that Egypt needs to ask its many lenders to forgive some of its debts and work towards improving its relationship with multilateral lenders. Meanwhile, Ezz said that the state needs to reopen the door for employment in the government sector and start appointing young people in the government sector.