The African Development Bank (AfDB) has approved U.S.$131 million to promote private sector development and economic diversification in Egypt.

Development Diaries reports that the funding is aimed at supporting phase one of the private sector development and economic diversification support programme (PSD-EDSP I).

According to the bank, the programme supports the Egyptian government’s efforts through a robust public reform matrix to facilitate increased private sector development by improving the business environment and diversifying sources of green growth.

Due to Egypt’s rapid population expansion and high unemployment rate, the country has substantial growth issues that call for a more developed and active private sector.

Although the private sector already contributes significantly to the economy by creating the majority of jobs, it is uncompetitive, lacks dynamism, and has low exports.

Low financial access, ambiguous policies, and macroeconomic weaknesses continue to impede the growth of the private sector.

This AfDB support aims to contribute to improving the business environment by adding new incentives for private sector investors and reducing delays in obtaining investment licenses.

It also aims to strengthen the framework for competition and commercial justice, promote key productive sectors, including manufacturing and agribusiness and support green transition by allocating the necessary land to renewable energy investments and promoting green hydrogen.

Photo source: AfDB