IMF raises our growth forecast, despite regional downgrade

Wednesday, 23 Apr 2025

IMF raises our growth forecast, despite regional downgrade

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Today at a glance

Economy

IMF raises our growth forecast, despite regional downgrade.

Outsourcing

Moroccan outsourcing player Intelcia inaugurates a new regional HQ.

TAX

Sugar, training services to lose VAT exemption under FinMin plan.

What We're Tracking Today

It’s day three of the IMF and World Bank’s spring meetup.

Also on our Radar

Banque Misr has put its financial weight behind the C3 Capital Fund 1.

Also on our Radar

Could Arab Contractors team up with Chinese construction giant CSCEC for Africa projects?

LAST NIGHT’S TALK SHOWS

Local banks rush to cut rates on savings following interest rate cut.

PLANET FINANCE

IMF cuts growth forecasts as tariffs hit global economy.

HARDHAT

A look through the state’s infrastructure spending targets for FY 2025-26.

What We're Tracking Today

Polymer banknotes are here to stay

Good morning, all. The international business press may be consumed by the gloomy global forecasts coming out of the IMF — but in very welcome news, Egypt seems to be one of the rare exceptions with its projections up from the Fund’s last Egypt outlook.

In today’s issue, we dig deep into the IMF’s growth projections for Egypt, the wider region, and the globe, cover the country’s latest outsourcing expansion, look into upcoming VAT changes for sugar, and more.

PSA-

#1- In case you missed the memo, tomorrow is off in observance of Sinai Liberation day for the private sector, public sector, and banks — and that includes us here at EnterpriseAM Egypt HQ. But we will see you all again on Sunday morning as we kick off the workweek with all the latest local business updates delivered directly to your inbox.

#2- Don’t forget to turn your clocks forward an hour this Friday with the return of daylight savings time shifting to GMT+3 from GMT+2 starting midnight on Thursday, 24 April.

#3- Owners of unauthorized buildings are getting six more months to legalize the status of their properties under the Building Reconciliation Act, with the window that was due to come to a close on 5 May now pushed to the start of November, according to a Local Development Ministry statement.

WEATHER- It’s another hot and summer day in Cairo today, with a high of 35°C and a low of 20°C, according to our favorite weather app.

It’s more than ten degrees cooler in Alexandria, with a high of 24°C and a low of 17°C.

And over the long weekend, expect to see temperatures drop to the high 20s and for temperatures to remain around the same mark for our friends on the Mediterranean.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

HAPPENING TODAY-

#1- It’s day three of the IMF and World Bank’s spring meetup and the event has been making waves in the international business press with the release of the Fund’s much anticipated World Economic Outlook report. Leading the headlines are its warnings of a “significant slowdown” in the global economy with a half a percentage point downgrade of the Fund’s global growth projections on the back of tariff uncertainty and disruption.

** We’ve picked apart the report’s forecasts for Egypt in the news well below — and if that isn’t enough for you, we’ve also got a rundown of its outlook across the globe in today’s Planet Finance section.

Representing Egypt at the event today is Finance Minister Ahmed Kouchouk, who will hold talks with his G20 counterparts and international financial institutions to discuss global economic outlooks, sustainable development financing, and debt relief for developing nations — all while highlighting Egypt’s improving macro indicators and investment climate.

Yesterday saw Planning and International Cooperation Minister Rania Al Mashat sit down with IFC President Makhtar Diop to discuss ongoing joint efforts to support the private sector, according to a cabinet statement. Among the topics of conversation were our airport privatization push — which we have tapped the IFC to give a helping hand — ongoing structural reforms, IFC investments in the country, and a move to unify corporate taxes under a presidential directive. We also found out that Diop will touch down in Egypt in June.

Al Mashat also met with several senior World Bank executives — including VP for Western and Central Africa Ousmane Diagana, Chief Economist Indermit Gill, and Senior Managing Director Axel van Trotsenburg — to discuss cooperation on structural reforms, investment climate diagnostics, and support for Egypt’s digital and AI transformation, according to a separate statement.

You can check out the full schedule on theevent’s official website.

#2- CIT Minister Amr Talaat is in the UAE to take part in Machines Can See 2025 — the region’s largest annual artificial intelligence summit, which kicks off today at Dubai’s Museum of the Future, according to a ministry statement. Held as part of Dubai AI Week, the two-day event brings together some 5k AI leaders, including ministers, tech execs, researchers, and global experts to discuss the future of artificial intelligence, its ethical frameworks, and its role in building safer, more sustainable societies.

FACT CHECK-

The central bank rejected social media speculation that it has stopped printing polymer EGP 10 and EGP 20 notes, after an image of a paper banknote appearing to show a recent production date led users to allege that the bank was now reversing course and phasing out the recently introduced polyester notes. “All EGP 10 and EGP 20 bank notes, both polymer and paper, will continue to circulate alongside each other” the bank said.

CIRCLE YOUR CALENDAR-

Three Chinese business delegations are headed to Cairo next month to discuss investment across multiple sectors, Asharq Business reports, citing two unnamed sources. The move comes as China is looking to expand its presence abroad after the Trump administration imposed average tariffs of 145% on incoming Chinese goods, majorly disrupting trade with its biggest export market.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

THE BIG STORY ABROAD-

The general theme in the news today? Backtracking — whether it’s US President Donald Trump denying plans to sack US Federal Reserve Chair Jerome Powell (and hinting at lower tariffs on China), Elon Musk saying he’ll take a step back from the US government to focus on Tesla, or Russian President Vladimir Putin saying he is prepared to halt his invasion of certain parts of Ukraine.

US stock futures reacted positively to Trump’s shift in tone on both Powell and China, rallying on the news as the USD also pared some of its losses following an earlier slump on Monday. (Reuters | Financial Times | WSJ)

Also rallying yesterday were Tesla’s shares, after Musk said he’ll be “significantly scaling back” his work with the government as he wraps up preparations for the Department of Government Efficiency (aka DOGE) to focus on Tesla, which reported a 9% y-o-y drop in revenues in its 1Q 2025 earnings report. Net income also plummeted 71% from a year earlier on the back of lower average selling prices and a need for manufacturing upgrades, according to Musk. (Financial Times | CNBC | Bloomberg | Reuters | WSJ)

Over in Russia and Ukraine, Putin reportedly said he’d be willing to give up parts of Ukraine that it does not control in return for an agreement with the US that could see it acknowledge Russia’s de facto control over Crimea, which was seized by Russia in 2014. Ukrainian officials are set to meet with representatives from the EU and the US in London later today to discuss the proposal. (FT)

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We take a look through the state’s infrastructure spending targets for FY 2025-26 to get an idea of what to expect in the fiscal year to come.

Tags:

currencies EGP WHAT WE’RE TRACKING TODAY

Somabay; every reason to fall in love.

Economy

IMF raises Egypt growth forecast, despite regional downgrade

The International Monetary Fund now sees Egypt’s growth coming in at a 3.8% y-o-y clip this fiscal year, up 0.2 percentage points from its January forecast, according to the fund’s World Economic Outlook report (pdf). Its projection for the coming fiscal year was also up, likewise coming in 0.2 percentage points higher from its previous projection to 4.3% y-o-y.

The upgrade is a vote of confidence in Egypt’s post-float reforms, Planning and International Cooperation Minister Rania Al Mashat said. “Despite global risks stemming from trade wars and protectionist policies, Egypt’s push for structural transformation and sustainable growth — led by the private sector — enables it to maintain positive growth rates,” she said. Al Mashat also reiterated her ministry’s forecast that the economy will grow quicker than the Fund expects, coming in at 4.0% y-o-y clip for the fiscal year.

The shift from a non-tradeable to a more tradeable economy has helped push the scales, which has already been reflected in strong 2Q FY 2023-24 figures showing growth of 2.1 percentage points y-o-y to 4.3%, Al Mashat added. The minister also pointed to a reduction in public investment spending that has helped shore up macro stability and improve the business climate. The uptick came with a rebound in tourism, growing ICT industry, and the logistics sector, despite a continued decline in Suez Canal revenues.

However, the regional outlook was not as promising, with the fund seeing growth across the MENA region reaching 2.6% y-o-y in 2025, down a whole 0.9 percentage points as Trump’s trade war and the downturn in oil prices takes its toll. Its regional outlook for 2026 was also scaled back, slowing 0.5 percentage points to 3.4% y-o-y.

It’s still too early to tell what impact tariffs will have on Egypt, but the state is monitoring developments and is ready to revise forecasts if needed, Al Mashat added. The minister also pointed to ongoing reforms and a more tradable economy as helping bolster the country’s resilience to external shocks.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The IMF also sees inflation continuing to dip this fiscal year, pencilling in a monthly average of 19.7% y-o-y. This a decent step up from the 9M monthly average of 22.8% y-o-y, according to EnterpriseAM calculations using data from state statistics agency Capmas. The projection also indicates that — in contrast to an expected 4Q uptick by some analysts — inflation will continue to fall from the 13.6% recorded in March for the coming three months.

Inflation is seen slowing again in the coming fiscal year to a 12.5% clip, bringing the country closer to the Central Bank of Egypt’s inflation target of 7% (±2 percentage points) inflation for 4Q 2026.

But it’s not all good news, with the current account deficit expected to widen to 5.8% of GDP in the current fiscal year, up from 5.4% last year, before tightening to 3.7% in 2026, the report reads. Unemployment is also expected to edge up from 7.4% in the last fiscal year to 7.7% this FY and the next.

Tags:

economy GDP IMF

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Outsourcing

Morocco’s Intelcia opens new regional headquarters in Egypt

Moroccan multinational outsourcing player Intelcia has inaugurated a new regional headquarters in Sheikh Zayed, less than two years after entering the Egyptian market. The move reflects the company’s long-term commitment to Egypt as a global hub for high-value outsourcing services, local talent development, and job creation, CEO Karim Bernoussi told EnterpriseAM at the opening ceremony yesterday. The new HQ is expected to create 1.3k direct jobs, the company said in a statement (pdf).

REMEMBER- Intelcia launched operations in Egypt in June 2023 with offices in Cairo and Alexandria.

Why Egypt? The talent pool, for one. Egypt's large pool of skilled CIT workers is a key driver of the country’s global competitiveness in outsourcing, CIT Minister Amr Talaat said at the event. The country produces more than 750k graduates annually, and the government is investing in skilling them to meet global outsourcing demand, he added.

The company also sees Egypt as a gateway to global markets. “Egypt is the best place to launch operations in the region,” Bernoussi said, citing the country’s unique multilingual talent — particularly English — and favorable cost structure compared to other African markets. Intelcia is leveraging local talent to serve clients in the US, UK, Colombia, and the Gulf, according to Bernoussi. The company doubled its Egypt revenues y-o-y in 2024, delivering services in seven languages to clients in North America, Europe, and the GCC, according to Mohamed Slimani, Intelcia’s CEO for the Americas and English-speaking markets.

Intelcia plans to double its local headcount to 4k employees by 2026, Bernoussi said. In addition to growing its customer relationship management services, the company also wants to expand into IT outsourcing for both the domestic and export markets, hiring engineers and later branching into business process outsourcing, consulting, according to Bernoussi.

The company will also open up more local offices to help house the new employees, with plans in the works to add two more in Alexandria and Cairo by 2026. It is also studying potential expansion into the new administrative capital and Mansoura, Bernoussi added, as part of its long-term strategy to serve multiple markets from Egypt by tapping into the country’s strategic location and talent pool.

DATA POINT- The number of outsourcing companies operating out of Egypt has increased 181.3% over the last three years, with the number of companies now standing at 180, Prime Minister Moustafa Madbouly said in a presser in February. This is good news for the government, which wants to see digital exports bring in USD 9 bn into the economy annually as of 2026 and then up to USD 13 bn by 2030.

Tags:

CIT CIT ministry Intelcia outsourcing

A MESSAGE FROM SEKEM

SEKEM partners with the Petroleum Ministry, EGPC, and Eni to drive organic farming

Building on its longstanding commitment to sustainable farming, SEKEM has signed a cooperation agreement for the “Towards Organic Agriculture” project with the Ministry of Petroleum and Mineral Resources, Matrouh Governorate, the Egyptian General Petroleum Corporation (EGPC), and IEOC Production B.V., representing Eni.

The agreement — signed during EGYPES 2025 — marks a turning point for organic agriculture in western Matrouh. The signing ceremony brought together H.E. Eng. Karim Badawi, Minister of Petroleum and Mineral Resources; Major General Khaled Shoeib, Governor of Matrouh; Eng. Francesco Gasparri, General Manager of IEOC; Eng. Salah AbdelKerim, CEO of EGPC; and Mr. Helmy Abouleish, CEO of SEKEM Group.

Around 700 farmers in Matrouh will get support to transition to organic farming under the “Towards Organic Agriculture” project. The initiative also integrates participants into a carbon credit certification system, offering new income streams and advancing Egypt’s sustainability agenda. This system allows farmers to earn additional income by reducing greenhouse gas emissions and sequestering carbon, aligning with global efforts to combat climate change.

SEKEM's “Economy of Love” (EoL) certification standard plays a crucial role in this initiative. EoL promotes sustainable, ethical, and transparent practices throughout the supply chain, ensuring fair compensation and protection for all stakeholders. By integrating EoL principles, the project not only supports organic farming but also fosters a holistic approach to sustainability, balancing economic, social, cultural, and environmental dimensions.

Full-spectrum support is at the core of the initiative, which equips smallholder farmers with organic inputs, composting tools, and photovoltaic systems for irrigation. It also facilitates organic certification and market access and integrates farmers into carbon credit systems to help boost their earnings.

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A MESSAGE FROM SEKEM SEKEM

TAX

Sugar, training services to lose VAT exemption under FinMin plan

Being a sweet tooth could soon start costing you more at the shops, as the Finance Ministry is planning to introduce amendments to the Value Added Tax (VAT) Law that would scale back exemptions on sugar, a government source told EnterpriseAM. Also on the VAT exemption chopping block are training services, along with soap detergents.The move aligns with the draft FY 2025-26 budget, which targets one-off revenues equivalent to 0.6% of GDP by phasing out tax exemptions.

REMEMBER- The Finance Ministry has been looking to address tax distortions by phasing out VAT exemptions and revisiting goods and services taxed at non-standard rates, three government sources told EnterpriseAM last month.

The move is expected to help your waistline and the budget — with sugar now forecasted to raise some EGP 443 mn after sugar was previously untaxed.

Training services will also soon have to pay the standard 14% rate for the first time, but we’re yet to hear how much the state thinks this will bring in.

The goods are from 19 that the International Monetary Fund has recommended we cut exemptions for. However, don’t expect to see all exemptions rolled back at once, as efforts to scale back exemptions will be gradual so as to not accelerate inflationary pressures, we were told.

It’s about more than increasing tax revenues for the year, because the Fund argued that sugar shouldn’t be given its favorable status as a core food item, given its contribution to high diabetes rates in the country and resulting healthcare strain, a source told us.

Despite higher prices for consumers, the move will actually help the private sector, our source in the government argued. We were told that investors have demanded a more universal value added tax across the board because exemptions stop them deducting tax on production inputs. Closing manufacturers out of this tax deduction on production inputs has eaten away at margins and made imported manufactured goods more attractive, the source explained,

The Finance Ministry has also raised its target for cigarette tax revenues to EGP 111.7 bn, up from EGP 95 bn this year. A government source told us that cigarettes remain a flexible revenue stream, with rates adjustable via ministerial decree if needed.

The first tax-driven price hike for cigarettes — a 12.5% increase — is slated for November, with no earlier adjustment expected unless diesel or fuel prices climb, head of the Federation of Egyptian Industries’ tobacco division Ibrahim Imbaby told EnterpriseAM.

ICYMI- Taxes on goods and services will drive state revenues for the upcoming fiscal year, with collections projected at EGP 1.1 tn — the largest share of the government’s EGP 2.6 tn tax revenue target.

Tags:

budget watch Finance Ministry tax

Moves

Shamrendra Singh named as new COO of Cheiron

Egypt’s largest independent energy exploration and production company has appointed Shamrendra Singh (LinkedIn) as its new chief operating officer, Cheiron said in a statement. Singh has more than 20 years of experience in the upstream oil and gas industry, spanning India, the North Sea, and Egypt.

Singh has been with Cheiron since 2016 and has held several senior roles across the organization, most recently serving as the managing director of Cheiron’s Badr Petroleum Company. Prior to joining Cheiron, Singh held leadership posts at BG Group — now incorporated under Shell following a 2016 acquisition.

Tags:

energy moves oil and gas

LAST NIGHT’S TALK SHOWS

Local banks rush to cut rates on savings following interest rate cut

The nation’s talking heads are picking up on banks moving to cut rates on their saving products as they react to a new lower interest rate environment after the central bank cut rates by 225 bps last Thursday. Leading the charge was Kelma Akhira’s Lamees El Hadidi, who invited former Financial Regulatory Authority head Sherif Samy to call in to break it down for her viewers (watch, runtime: 4:22).

“Each bank has different targets, but all eyes are on NBE and Banque Misr, since they control nearly half the market share,” Samy said. Earlier in the day, the NBE cut rates on some of its high interest certificates by 225 bps. More banks are expected to follow suit — although some may opt to maintain higher yields to retain liquidity, banking expert Hany Abou El Fotouh recently told us.

Tags:

banking economy IMF interest rates LAST NIGHT’S TALK SHOWS monetary policy

Also on our Radar

Banque Misr backs the country’s first onshore private investment in public equity fund. PLUS: Arab Contractors + CSCEC, Oriental Industrial Projects

PRIVATE EQUITY-

Banque Misr has put its financial weight behind the C3 Capital Fund 1 — the country’s first onshore private investment in public equity (PIPE) fund — the state-owned lender said in a statement (pdf). The bank said it contributed around 20% of the EGP 1.8 bn first close — which by our math comes out to around EGP 360 mn.

What they said: “We are committed to creating investment openings that enhance the efficiency of the Egyptian capital market, contribute to the growth of local companies, and attract other companies to the EGC. Through this investment, we aim to enhance the added value of the local market and contribute to achieving sustainable growth strategies through effective partnerships, said CEO Hisham Okasha.

REMEMBER- CI Capital and Compass Capital launched the C3 Capital Fund 1 last month. The fund, which targets EGP 3 bn at final close, will take active positions in EGX-listed companies through a private investments in public equities strategy. It will take 10-33% stakes in EGX-listed firms, securing board seats and driving short- to medium-term growth. Its other backers include E-finance, CIB, Suez Canal Bank, Misr Life Ins., and Midbank.

INFRASTRUCTURE-

Could Arab Contractors team up with Chinese construction giant CSCEC for Africa projects? Housing Minister Sherif El Sherbiny proposed to officials from China’s state-owned China State Construction Engineering Corporation (CSCEC) that it link up with state-owned Arab Contractors to jointly develop projects across Africa, according to a Housing Ministry statement. The idea was received well by the Chinese side, who described it as "excellent proposal,” according to the statement.

Partnering with the world’s largest construction company by revenue for projects across Africa would be no small thing, given the hundreds of USD bns that China invests into its Belt and Road initiative in the continent. Between 2013 and 2023, Chinese companies signed over USD 700 bn worth of contracts for projects in Africa under the initiative, according to Chinese state media.

MANUFACTURING

Oriental Weavers subsidiary Oriental Industrial Projects (OIP) wants to set up a EGP 300 mn SME-focussed complex in Ain Sokhna, OIP Managing Director Sameh Attia told Al Borsa. The complex will house 20 industrial units and wrap up construction in 2025.

Tags:

ALSO ON OUR RADAR Arab Contractors China China State Construction Engineering Corporation CI Capital Compass Capital Manufacturing Oriental Weavers private equity real estate SMEs Suez Canal Economic Zone

PLANET FINANCE

IMF cuts growth forecasts as tariffs hit global economy

IMF forecasts lower global growth this year: The International Monetary Fund (IMF) forecasts global growth to log 2.8% in 2025, down 0.5 percentage point from previous estimates, it said in its World Economic Outlook report (pdf). Growth is expected to edge up to 3.0% in 2026, though this remains below the IMF’s earlier projections at 3.3%.

We all know the culprit: The revision is a direct consequence of “new trade measures and their indirect effects through trade linkage spillovers, heightened uncertainty, and deteriorating sentiment.”

Major economies projected to take a hit: The US is now expected to grow 1.8% in 2025, down nearly one percentage point from the previous forecast, as “greater policy uncertainty, trade tensions, and a softer demand outlook” weigh down on consumption. Meanwhile, Japan’s growth was cut by 0.5 points to 0.6%, with tariff concerns expected to offset gains in private consumption and disposable income. The Fund also downgraded its forecast for Canada’s growth by 0.6 percentage points, and for the UK by half a point.

China and India will bear the brunt too: China’s 2025 outlook was cut by 0.6 points to 4.0%, as trade restrictions “offset the stronger carryover from 2024 and fiscal expansion in the budget.” The following year comes with a similar downward revision and growth forecast. Meanwhile, India’s growth was trimmed by 0.3 percentage points to 6.2%.

Across the Atlantic: Growth in the Eurozone is expected to decline “slightly” to 0.8% this year. Still, the IMF projects a stronger growth of 1.2% next year, driven by stronger consumption and rising wages as “debt brake” reforms in Germany spur growth.

Spain is a rare bright spot in the Fund’s updated forecasts, with an upward revision of 0.2 percentage points, leaving 2025 growth forecast at 2.5%. This reflects “a large carryover from better-than-expected outturns in 2024 and reconstruction activity following floods,” the IMF said.

Tariff clouds may turn into showers: Recent waves of US tariffs and the resulting retaliatory measures by China, Canada, and the EU have created “unprecedented” policy uncertainty. This is dragging down global trade volumes, which are now expected to grow just 1.7% in 2025 — a full 1.5 percentage points lower than previous expectations.

A new era: “The increased uncertainty and tightening of financial conditions could well dominate the short term, weighing on economic activity, as reflected in the sharp decline in oil prices,” IMF chief economist Pierre-Olivier Gourinchas said in a blog post. Growth prospects could see immediate improvement, however, if countries managed to move past differences and forge new trade agreements, Gourinchas added.

The inflation outlook Global inflation is expected to decline the next two years, hovering at around 4.3% in 2025 (revised slightly upwards) and at 3.6% in 2026.

MARKETS THIS MORNING-

Asian markets are in the green this morning, after comments from the Donald sparked hopes for tariff de-escalation. Hong Kong’s Hang Seng is leading gains with a 1.8% increase, followed by Japan’s Nikkei at 1.7%. Wall Street futures are also inching up following strong gains yesterday, after Trump denied plans to remove the Fed chief.

EGX30	30,844	-0.7% (YTD: +3.7%)
USD (CBE)	Buy 50.97	Sell 51.10
USD (CIB)	Buy 50.99	Sell 51.09
Interest rates (CBE)	25.00% deposit	26.00% lending
Tadawul	11,586	+0.3% (YTD: -3.7%)
ADX	9257	-0.2% (YTD: -1.7%)
DFM	5134	+0.6% (YTD: -0.5%)
S&P 500	5288	+2.5% (YTD: -10.1%)
FTSE 100	8329	+0.6% (YTD: +1.9%)
Euro Stoxx 50	4961	+0.5% (YTD: +1.3%)
Brent crude	USD 67.94	+0.7%
Natural gas (Nymex)	USD 3.05	+1.3%
Gold	USD 3348.90	-2.1%
BTC	USD 92,859.30	+6.5% (YTD: -0.7%)

THE CLOSING BELL-

The EGX30 fell 0.7% at yesterday’s close on turnover of EGP 2.8 bn (30.5% below the 90-day average). Local investors were the sole net buyers. The index is up 3.7% YTD.

In the green: Emaar Misr (+2.4%), Madinet Masr (+1.5%), and Edita (+1.3%).

In the red: Eipico (-4.4%), Telecom Egypt (-3.1%), and Eastern Company (-2.3%).

CORPORATE ACTIONS-

Madinet Masr has purchased 1.5 mn shares as part of a treasury stock buyback program, the company said in a disclosure (pdf). The real estate company last week bought back 42.7 mn shares — around 2% of its capital. The total program aims to buy back up to 4% of the company’s total capital (around 85.4 mn shares) through open market transactions.

Tags:

Financial Markets Planet Finance

HARDHAT

A look through the state’s infrastructure spending targets for FY 2025-26

Infrastructure is set to receive substantial state funding in the upcoming fiscal year. The government is planning to direct a significant portion of its EGP 3.5 tn in total investments toward infrastructure-related sectors, including transportation, electricity, water and sanitation, oil and gas, and communications under its Economic and Social Development Plan for FY 2025-2026 (pdf).

The big picture: The government is targeting total investments of EGP 3.5 tn in FY 2025-26, up from an estimated EGP 2.6 tn in the current fiscal year. Public investments will account for EGP 1.2 tn, while the private sector is expected to contribute EGP 1.9 tn, representing c. 63% of the total and reflecting a shift toward greater private sector participation.

The government is dividing the investments across three main sectoral groups. Key service sectors like transport, storage, wholesale and retail trade, ins. and finance services, and tourism are allocated the largest share at 42%. Primary economic sectors such as agriculture, fishing, mining, and quarrying, as well as secondary sectors such as manufacturing, energy, and construction are expected to account for 34% of total fixed investments. Meanwhile, sectors tied to human and social development — such as education and healthcare — are expected to receive the remaining 24%.

Water and sanitation projects are a priority: Some EGP 77 bn worth of public investment has been allocated to complete drinking water and sanitation projects, including those that fall under the government’s Decent Life initiative. These investments will be split between EGP 27.8 bn for water projects and EGP 49.2 bn for the sanitation sector. During the fiscal year, the government aims to set up 56 drinking water stations with a capacity of 1 mn cubic meters per day, 17 desalination facilities with a capacity of 455k cubic meters per day, 135 sanitation projects, and 33 water treatment plants.

Lower spending on oil and gas: The government has allocated EGP 25.8 bn to the oil and gas sector — a far cry from the EGP 136 bn during the present fiscal year. The funds will be used to build petroleum pipelines, renovate and replace strategic fuel storage facilities, upgrade the national gas grid, and continue the construction of aircraft refueling stations.

Egypt’s fastest-growing sector is seeing major cuts: Public investment allocated to the ICT sector has been slashed to EGP 13 bn from EGP 85 bn in the current fiscal year. The funds will go toward telecom infrastructure, digital transformation, digital skills and capacity-building initiatives, IT industry localization, improving cybersecurity, and growing exports of outsourcing and consulting services. The government also plans to push ahead with software development, e-signature applications, and complete the first two phases of the new capital’s Knowledge City.

The plan aims to raise digital exports to USD 8.5 bn, with outsourcing services accounting for USD 6 bn of that figure.

REMEMBER- The government wants to see digital exports bring in USD 9 bn into the economy annually as of 2026 and then up to USD 13 bn by 2030.

Electricity and renewables will receive EGP 100 bn in public investment to help power megaprojects like the high-speed electric train, the Cairo monorail, and land reclamation. The funds will also support the completion of a 20 MW solar plant in Hurghada and prepare six sites for renewable energy projects across the Nile, Gabal El Zeit, Nag Hammadi, Ras Shukeir, South Hurghada, and Benban.

ICYMI- The government wants to increase renewables’ contribution to the energy mix to 18.6%by FY 2026 -27, 42% by 2030, and 65% by 2040.

On the logistics front: The state aims to complete 32 inter-governorate roads and 11 bridge projects in the next fiscal year. It also aims to implement 10 projects to streamline the flow of goods at land and dry ports and launch several initiatives at maritime ports, including kicking off construction at the Safaga Port.

Industry localization efforts continue: The government has allocated EGP 27 bn — primarily to be executed by public-sector companies — to support manufacturing. The state aims to focus on completing industrial zones, which includes introducing utilities at Robbiki Leather City and upgrading the infrastructure at zones in Sohag and Qena. The plan also focuses on building export-oriented industries, developing human capital, and supporting green industry. Priority sectors include iron and steel, paper, pharmaceuticals, vaccines, pipes, boilers, and auto components and spare parts.

Your top infrastructure stories for the week:

Property developer Landmark for Real Estate Development (LMD) is in talks with the Egyptian government to develop a new USD 4 bn mixed-use project in Cairo. The development will be located in “one of Cairo’s newest urban areas” and could kick off construction before the end of 2025.
The Red Sea Ports Authority is mulling awarding the EGP 4 bn Taba Port development project to Suez Canal Authority’s subsidiary Suez Canal Ports Company. The port is slated to give local exports access to new markets at lower costs and ease the reliance on traditional land routes by opening up faster and more efficient access to Jordan and Saudi Arabia.
The country’s first green chemicals plant is officially under construction, after China’s Binhua Group — or Befar — broke ground on their USD 500 mn chlor-alkali production facility in the China-Egypt TEDA trade zone. The big-ticket project is split between a USD 300 mn first phase — to be completed within 18 months — and a USD 200 mn second phase.

Tags:

budget watch construction Hardhat infrastructure

CALENDAR

APRIL

27 April (Sunday): Deadline for applications to MINT Incubator's 3-month equity-free startup program with Alex Angels.

28-30 April (Monday-Wednesday): FDC Regional Digital Industry Summit will launch cybersecurity index.

30 April (Wednesday): Deadline for Australia Awards Scholarships applications.

Mid-April: Egyptian trade delegation to promote investments during an official visit to Canada

Business-to-business forum of Egyptian and Moroccan companies to promote bilateral trade, Cairo, Egypt.

The Suez Canal Container Terminal will begin trial operations for its expanded East Port Said facilities.

Government begins talks with EU on the second tranche of the of the EUR 5 bn concessional loans package

Saxony Delegation visit to Egypt.

Egypt to launch trial operations of the first phase of its USD 1.8 bn Egypt-Saudi electricity interconnection project, ahead of schedule

Tahya Misr 1 container terminal to begin operations, adding 3.5 mn container capacity to the port.

MAY

7-10 May (Tuesday-Saturday): Egypt hosts the 24th Pan Arab Junior and Ladies Golf Championship.

10 May (Saturday): Capmas expected to publish inflation data for April.

1 May-10 July (Thursday-Tuesday): 500 Global's Scale Up Program, Cairo

18-20 May (Sunday-Tuesday): First Arab International Exhibition for Sustainable Development.

22 May (Thursday): Monetary Policy Committee’s third meeting.

Egyptian Exporters Association (Expolink) exhibition, Italy

Egyptian-Russian Business Forum

May 2025: Egypt-Singapore Business Forum, Cairo.

JUNE

10 June (Tuesday): Capmas expected to publish inflation data for May.

MPs approveextension of tax dispute resolution window until 30 June 2025, with potential for further extension

Coficab to complete its USD 88 mn automotive cable and electrical factory in Tenth of Ramadan City

Realme to open smartphone factory

IFC President Makhtar Diop to visit Egypt

JULY

10 July 2025 (Thursday): Monetary Policy Committee’s fourth meeting.

15-16 July 2025 (Tuesday-Wednesday): Egypt Mining Forum.

July 2025: The first operational trail of Egypt-KSA electricity interconnection line.

Etihad Airways to launch twice-weekly flights to Alamein

AUGUST

28 August 2025 (Thursday): Monetary Policy Committee’s fifth meeting.

Tourism Development Authority to waive late payment penalties for land purchases if full installments are paid

SEPTEMBER

Egypt Education Platform (EEP) to launch two new schools in Alexandria and Somabay

Egypt Otsuka’s nutritional products factory in Tenth of Ramadan to begin operations, with exports to Gulf countries expected by January 2026

OCTOBER

2 October 2025 (Thursday): Monetary Policy Committee’s sixth meeting.

NOVEMBER

20 November 2025 (Thursday): Monetary Policy Committee’s seventh meeting.

November: Egypt to join the EU’s Horizon Europe research and innovation program.

DECEMBER

1-4 December: Egypt Defence Expo (EDEX), Egypt International Exhibition Centre.

25 December: (Thursday): Monetary Policy Committee’s eighth meeting.

EVENTS WITH NO SET DATE

1Q 2025: The Egyptian-Italian business forum

1Q 2025: Investment Minister Hassan El Khatib to visit Italy

1Q 2025: Eipico’s biopharma plant to begin operations

1Q 2025: Finance Ministry to launch public consultations on its tax policy document

Mid-2025: EGX launches sustainability index.

2Q 2025: Financial Regulatory Authority (FRA) to introduce derivatives on the EGX

2Q 2025: Safaga Terminal 2 to start operations

1H 2025: EGX launches a sharia-compliant sustainability index.

1H 2025: Digital Financial Identity Company will launch an electronic bank account opening service

1H 2025: The Egyptian-US Investment Forum.

1H 2025: The Egyptian Mineral Resources Authority will relaunch a global tender for gold exploration through Shalateen Mineral Resources company.

3Q 2025: Nasr Automotive begins locally manufacturing passenger cars.

Mid-2025: The Administrative Capital for Urban Developments to roll out the second phase of offering industrial plots to investors

2025: The InterAcademy Partnership assembly

2025: Nile Basin States Summit, Cairo, Egypt

2025: Release of the government’s Startup Charter document

2026

1 January: European Union’s Carbon Border Adjustment Mechanism (CBAM) to fully come into effect

May 2026: End of extension for developers on 15% interest rates for land installment payments

2027

20 January-7 February: Egypt to host the African Games

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings for 2027.

End of 2027: Trial operations at the Dabaa nuclear power plant expected to take place

September 2028: First unit of the Dabaa nuclear power plant begins operations

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