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Contact at AFI team is Enoch Randy Aikins
This entry was last updated on 24 August 2022 using IFs v7.63.

In this entry, we first describe the Current Path forecast for Egypt as it is expected to unfold to 2043, the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term vision for Africa. 

The Current Path forecast is divided into summaries on demographics, economics, poverty, health/WaSH and climate change/energy. A second section then presents a single positive scenario for potential improvements in stability, demographics, health/WaSH, agriculture, education, manufacturing/transfers, leapfrogging, free trade, financial flows, infrastructure, governance and the impact of various scenarios on carbon emissions. With the individual impact of these sectors and dimensions having been considered, a final section presents the impact of the Combined Agenda 2063 scenario. 

We generally review the impact of each scenario and the Combined Agenda 2063 scenario on gross domestic product (GDP) per person and extreme poverty except for Health/WaSH that uses life expectancy and infant mortality. 

The information is presented graphically and supported by brief interpretive text. 

All US$ numbers are in 2017 values

Summary

  • Current Path forecast
    • Egypt is a lower middle-income country in Africa with a population of 100.4 million people. It is bordered by Israel, the Gaza Strip, Sudan and Libya, as well as the Mediterranean Sea and the Red Sea. Life expectancy in Egypt is around 72.5 years, and there is a high death burden from non-communicable diseases. Egypt’s GDP per capita in 2019 stood at US$12 426, and about 22.3 million people live below the benchmark poverty line of US$3.20 for lower middle-income countries. Jump link to forecast: Current Path
    • In the Current Path forecast, Egypt increases its population from an estimated 100.4 million people in 2019 to 141 million people in 2043 and witnesses a slower rate of urbanisation, such that by 2043, 57% of the population will reside in urban areas. Jump link to Demographics: Current Path
    • Egypt is expected to experience significant growth in GDP in 2043 on the Current Path, reaching US$983.8 billion, and an increase in GDP per capita to US$17 015. The country also sees a slight decrease in the size of the informal sector, from 20.5% of GDP in 2019 to 18.5% in 2043, and an increase in the reliance on the service sector for job creation, with its contribution to GDP to growing US$531.3 billion (54% of GDP). Jump link to Economics: Current Path
    • The country still struggles with the number and proportion of people living below the poverty line of US$3.20 with 17 million poor people (12.1% of the population) by 2043 on the Current Path. Jump link to Poverty: Current Path
    • Egypt more than doubles its carbon emissions to over 150 million tons in 2043. Jump link to Carbon emissions/Energy: Current Path
  • Sectoral scenarios
    • The Stability scenario will improve Egypt’s score on the government security index to 0.92 in 2043, and simultaneously increase GDP per capita to US$17 429 thereby reducing the proportion of people living below the poverty line to 10.8% of the population. Jump link to Stability scenario
    • Egypt will achieve the minimum ratio of 1.7 working-age persons for each dependant required for the materialisation of the Demographic dividend by 2029 in the Demographic scenario. It will increase to 2.2 working-age persons for each dependant by 2043. Jump link to Demographic scenario
    • The Health/WaSH scenario will increase life expectancy to 76.9 years by 2043 and reduce infant mortality per 1 000 live births to 9.5. Jump link to Health/WaSH scenario
    • Egypt’s yield per hectare will fall to 32.2 metric tons in the Agriculture scenario, and the nation will remain a net importer of agricultural products with a balance of 37.6% total agricultural demand by 2043. Jump link to Agriculture scenario
    • The Education scenario will result in a higher GDP per capita of US$17 538 by 2043, and the number of poor people in Egypt will also decline as a result of implementing this scenario. Jump link to Education scenario
    • In the Manufacturing/Transfers scenario, government welfare transfers to households will increase to US$95.7 billion in 2043 and increase GDP per capita to US$18 203. Jump link to Manufacturing/Transfers scenario
    • The Leapfrogging scenario will increase mobile broadband subscriptions per 100 people from 63.2 in 2019 to 153.1 in 2043, and also enable access to electricity to 99.1% of the urban population and 99.3% of the rural population. Jump link to Leapfrogging scenario
    • There will be an increase in GDP per capita to US$18 116 by 2043 in the Free Trade scenario and a reduction in the proportion of poor people in Egypt to 10.4% of the population. Jump link to Free Trade scenario
    • Foreign aid as a percentage of GDP declines in the Financial Flows scenario while foreign direct investment flows to Egypt’s economy increase from 3.5% of GDP in 2019 to 4.5% by 2043. Jump link to Financial Flows scenario
    • The Infrastructure scenario will increase the percentage of the rural population living within 2 km of all-weather roads to 93.6% by 2043. Jump link to Infrastructure scenario
    • The GDP per capita increases to US$17 505 in 2043 in the Governance scenario. Jump link to Governance scenario
    • While Egypt’s carbon emissions are projected to increase in all the scenarios, the Manufacturing/Transfers scenario will have the greatest effect, with carbon emissions of 157.2 million tons in 2043. Jump link to Impact of scenarios on carbon emissions
  • The Combined Agenda 2063 scenario
    • In the Combined Agenda 2063 scenario, Egypt’s GDP per capita increases by US$6 496 compared to the Current Path forecast in 2043, with the Manufacturing/Transfers and Free Trade scenarios having the greatest potential to increase GDP per capita. There is significant growth in the size of the economy to US$1.5 trillion by 2043, compared to the Current Path forecast of US$983.8 billion in the same year. Egypt sees a reduction in the number of people living below the poverty line to 4.1 million people (3% of population) and a significant increase in carbon emissions to 176.5 million tons by 2043. Jump link to Combined Agenda 2063 scenario

All charts for Egypt

Chart 1: Political map of Egypt
Chart
Egypt: Current Path forecast

Egypt: Current Path forecast

This page provides an overview of the key characteristics of Egypt along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenised in relationships across crucial global systems. We use 2019 as a standard reference year and the forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term development vision.

Egypt is one of the 23 lower middle-income countries in Africa. It is a transcontinental country spanning the north-east corner of Africa and the south-west corner of Asia. It is bordered by Israel, the Gaza Strip, Sudan and Libya, as well as the Mediterranean Sea and the Red Sea. With a rich legacy, and often referred to as the ‘cradle of humanity’, the nation thrives on tourism from all over the world. Egypt had a population of over 100 million people in 2019. With Arabic as its official language, Egypt is considered a regional power both in Africa and in the Middle East. Geographically, it is the world’s 30th largest country in terms of landmass, but 99% of the population makes use of only 5.5% of the land, resulting in it being one of the most densely populated countries in Africa. Egypt’s topography is mostly desert with some oases, with very little rainfall on average, and a hot, sunny and dry climate. Its largest cities include Cairo, the capital, Alexandria and Giza, all of which are popular tourist cities. Egypt's economy depends mainly on agriculture, telecommunication, petroleum exports, natural gas and tourism. It is also home to the Suez Canal, an artificial sea-level waterway which is considered the most important centre of maritime transport in the Middle East.

Chart 1: Political map of Egypt
Chart
Demographics: Current Path

Demographics: Current Path

Egypt’s population in 1990 was 56.1 million, and over the past 29 years it has increased by about 79.1%, resulting in an estimated population of 100.4 million in 2019. The growth in Egypt's population can be attributed to the high fertility rates in many parts of the country, particularly in rural areas where fertility rates are far above the national average.[1H Sayed, Trends of Fertility Levels in Egypt in Recent Years, UNFPA.] Another factor is the high proportion of women of childbearing age. The population of Egypt is forecast to increase to 141 million by 2043 on the Current Path; this constitutes an increase of 40.4% over the next 22 years, which will be slower than the previous 29 years. Egypt had a youth bulge of 37.6% and a median age of 24.6 years in 2019. Although the youth bulge is projected to decline, it will not fall below 35% across the forecast period. The large youth bulge in the country raises concerns about youth unemployment and underemployment. The IMF projected in 2019 that the country needs to create about 3.5 million jobs over the next 5 years to attain its demographic dividend.[2International Monetary Fund, Arab Republic of Egypt: Fifth review under the extended arrangement under the extended fund facility-press release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt, 10 October 2019.]

In addition, 33.8% of Egypt’s population is below the age of 15 years and 24.9% is below the age of 30 years. With the expected decline in the fertility rate from 3.3 births per woman in 2019 to 2.1 births in 2043, the projected proportion of people below the age of 15 years will fall to 25.3% over the next 24 years. As a result, the share of the adult population of 30 years and older is projected to increase from 41.3% in 2019 to 48.6% in 2043. The average life expectancy in Egypt was 72.5 years in 2019, but it is estimated to increase to 76.2 years in 2043.

In 1990, more than half (56.5%) of Egypt’s population resided in rural areas. Interestingly, the proportion of people in rural areas over the past 29 years steadily increased to 57.2% signalling ruralisation or counter-urbanisation in the country. The higher rural population can be explained by the fact that the majority of the population is concentrated along the fertile soils of the Nile valley. Nonetheless, there has been rapid migration into Cairo such that in 2017, about 500 000 additional people moved to settle in the city. However, about two-thirds of residents in the Greater Cairo Region live in informal settlements which are mostly slums and lack basic social amenities such as water and electricity. By 2043, it is projected that the proportion of the population that will reside in rural areas will slightly decline to 53%, meaning that the country will experience a slower rate of urbanisation.

The total land area for Egypt is approximately 101 million km². In 2019, Egypt was the most densely populated country in North Africa and the 17th most densely populated country in Africa. The population density of Egypt is estimated to be about 1.01 people per hectare, which is higher than the average of 0.45 for Africa and 0.32 for Northern Africa. The majority of Egyptians reside in the rural areas along the fertile Nile valley and in the urban clusters of Cairo and Alexandria. The most densely populated cities in Egypt include the national capital Cairo, Giza, Luxor and Kalyub. In 2017, Cairo alone witnessed an additional 500 000 people settling in the city, making it the world’s fastest growing city.[3Urbanet, Urban development in Egypt – Infographics, 22 October 2019.]

Chart 4: Population density map for 2019
Chart
Economics: Current Path

Economics: Current Path

Egypt is the third largest economy in Africa after Nigeria and South Africa. From 1990 to 2019, the GDP of Egypt increased by 245.7% from US$100.9 billion in 1990 to US$348.8 billion in 2019. Egypt’s economic liberation began in the 1970s and it intensified in the 1980s. Some of the policies implemented included the substitution of expenditure on defence for infrastructural projects, as well as the shoring up of the natural gas industry, and the liberalisation of foreign trade.[4DP Little, Egypt, Britannica.] By the late 1990s, these investments gradually paid off, leading to an improvement in GDP. Since then, the oil and gas industry has been a major contributor to economic growth in the country. The discoveries and dynamic legislation of large oil fields in areas such as the Gulf of Suez, Western Desert, Eastern Desert and Sinai have strengthened the robust oil and gas industry. In recent years, the government, with the assistance of the IMF, has embarked on an economic reform agenda to restructure the economy. Through this, tax reforms have been introduced, while government expenditure has been cut down and several infrastructural projects have been embarked on to boost the economy. This has contributed to noticeable improvements in macroeconomic indicators and helped the country’s macroeconomic environment to be resilient in the face of the COVID-19 shock. Egypt’s GDP is estimated to almost triple from its level in 2019 to US$983.8 billion by 2043. The increase in GDP reflects the higher economic growth expected to occur within the next 22 years compared to previous years.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of Egypt.

Egypt’s GDP per capita has seen a steady increase over time despite the country’s rapid population growth. From 1990 to 2019, the GDP per capita of Egypt increased by 93.3% from US$6 429 in 1990 to US$12 426 in 2019. The increase in GDP per capita reflects relatively high GDP growth compared to population growth over the period. While population growth has hovered in the range of 1.7% to 2.7%, GDP growth within the same period was mostly above this range and as high as 7.2% in 2008. With the projected increase in GDP and decline in fertility rates, GDP per capita will rise over the next 22 years, such that by 2043, it will increase to US$17 015. This represents an increase of about 40% over the period. Across the forecast horizon, Egypt’s GDP per capita is far higher than the average of lower middle-income countries in Africa. Indeed, the gap between Egypt and its income group peers on the continent in terms of GDP per capita is expected to almost quadruple from US$2 006 in 1990 to US$7 873 by 2043. This suggests that Egypt either has a slower population growth rate or higher economic growth, or even both, compared to the average of lower middle-income countries in Africa.

The size of the informal sector in Egypt was equivalent to 20.5% of GDP, representing US$65.6 billion, in 2019, which was lower than the average of 29.2% for lower middle-income African countries. This suggests that, compared to its income peer group, Egypt has performed relatively better in formalising its economy. The size of the informal sector is expected to slightly decline to 18.5% by 2043. In 2019, 50.5% of the total labour force was employed in the informal sector. This is expected to decline to 46.2% by 2043 on the Current Path. It is therefore not surprising that the level of informality will also decline within the same period. The informal sector in Egypt accounts for about 68%–70% of all new jobs.[5M Soliman, Egypt’s Informal Economy: An Ongoing Cause for Social Unrest, SIPA, Journal of International Affairs, 29 October 2020. ] The country is inundated with small businesses that are unable to offer formal employment to the teeming labour force. Even many larger firms do not offer formal employment, as only about half of employees in such firms have contracts and social insurance.[6World Bank, Egypt: World Bank Issues Brief – No. 2, Informal is the new normal, Egypt’s Informal Sector is on the Rise, but careful Regulatory Innovation Can Help Turn the Tide. ] By 2043, the size of the informal sector in Egypt is projected to be about 8 percentage points lower than the average of lower middle-income African countries.

The IFs platform uses data from the Global Trade and Analysis Project (GTAP) to classify economic activity into six sectors: agriculture, energy, materials (including mining), manufacturing, service and information and communication technologies (ICT). Most other sources use a threefold distinction between only agriculture, industry and services with the result that data may differ.

The three largest contributing sectors to GDP in Egypt are service, manufacturing and agriculture, respectively. In 2019, the service sector’s contribution to GDP was about US$172.6 billion (49.5% of GDP). In Egypt, the service sector is dominated by tourism and the telecommunication sub-sectors, and provides employment to almost half of the Egyptian population. Its contribution to GDP is expected to increase to US$531.3 billion by 2043 (54% of GDP). The manufacturing sector is currently the second largest contributor to GDP with a share of 23.2% (US$81 billion) in 2019. The share of the manufacturing sector is projected to increase to 26.9% (US$265 billion). The agriculture sector is the third most significant contributor to GDP with a share of 13.1% (US$45.7 billion). However, it is expected that by 2032, the ICT sector will overtake the agriculture sector as the second largest contributor to GDP, so that by 2043, the ICT sector’s share of GDP will be 3.9 percentage points more than that of agriculture.

The data on agricultural production and demand in the IFs forecasting platform initialises from data provided on food balances by the Food and Agriculture Organization (FAO). IFs contains data on numerous types of agriculture but aggregates its forecast into crops, meat and fish, presented in million metric tons. Chart 9 shows agricultural production and demand as a total of all three categories.

Egypt’s total agricultural land area was 38 360 km2 in 2018, constituting 3.9% of the total land area. This translates into about 0.05 hectares of cultivated land per person. In 1990, Egypt’s demand for agricultural products outstripped domestic production by 9.8 million metric tons; this gap widened to 25 million metric tons in 2019. Egypt is disadvantaged in many ways in terms of agricultural production. Declining agricultural land coupled with water scarcity and climate change factors have seriously challenged the future security of food in the country. Although the yield per hectare for crops is expected to increase slightly from 29.2 metric tons in 2019 to 30.2 metric tons in 2022, it will afterwards decline to 28 metric tons per hectare by 2043. This accounts in part for the expected widening of the gap between agricultural demand and production. By 2043, demand will outstrip domestic production by about 81.7 million metric tons, representing a 172.3% increase over the period, which raises concerns about food security in the country within the next 24 years.

Poverty: Current Path

Poverty: Current Path

There are numerous methodologies for and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$1.90 per person per day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal (SDG) 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017:

  • US$3.20 for lower middle-income countries 
  • US$5.50 for upper middle-income countries
  • US$22.70 for high-income countries.


As a lower middle-income country, Egypt uses the US$3.20 per person per day benchmark. As of 2019, 22.1% of Egypt's population (22.3 million people) were surviving on US$3.20 dollars per day. This is projected to increase, peaking in 2026 at about 26.1 million people (23% of the population). The majority of the poor population is concentrated in the governorates of the Upper Egypt region. After 2026, both the number and proportion of people living below US$3.20 will experience a downward trend so that by 2043, the number of people living in extreme poverty will be 17 million (12.1% of the population). This means that the proportion of the poor population will reduce by 10.1 percentage points, corresponding to 5.2 million people who will be lifted above the poverty line of US$3.20. As part of efforts to reduce poverty, especially among rural dwellers, the Egyptian government has committed to the implementation of Hayah Karima (Decent Life). Throughout the period under consideration, the proportion of poor people in Egypt is significantly lower than the average of lower middle-income countries in Africa, such that by 2043, the extreme poverty rate in Egypt is a whopping 26.2 percentage points below the projected average of 38.3% for the income group in Africa.

Carbon Emissions/Energy: Current Path

Carbon Emissions/Energy: Current Path

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydro, nuclear and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent (BBOE). The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBTUs) or 1 700 kilowatt-hours (kWh) of energy.

The main energy types produced in Egypt are oil and gas. By 1998, the country was producing a total of 866 000 barrels of crude oil daily with a large reserve potential for the future. In 2017, it was estimated that Egypt had about 4.4 billion barrels of oil reserves (BBOE) and 13 714 BBOE gas reserves. In 2019, the total amount of oil produced in Egypt amounted to 224 million BBOE, constituting about 85.7% of total energy production. This represents a decline from the 329 million BBOE equivalent to 86% of total energy production in 1990. It was complemented by gas production worth 50 million BOE, representing 12.8% of total energy production. By 2019, gas became the dominant energy produced in Egypt, with a total production amounting to 290 million BBOE, representing 56% of total energy production — an increase from the 49 million BBOE, representing 6% of total energy production, in 1990. Despite the large production and natural reserves of oil and gas, most Egyptians experience gas and electricity shortages owing to low generation capacity vis-à-vis increasing demand.[7A Ismail, The Power Generation Crisis in Egypt, [email protected], 3 September 2014.] As a result, the country became a net importer of oil and gas in 2012. Aside from these two main energy types, the country produces a negligible amount of hydro and nuclear energy. By 2043, gas and oil production will amount to 353 million BBOE and 298 million BBOE, respectively, equivalent to 48% and 41% of total energy production. The production of other renewable energies will account for 8% of total energy production in the country, representing 59 million BBOE, by 2043.

Carbon is released in many ways, but the three most important contributors to greenhouse gases are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4). Since each has a different molecular weight, IFs uses carbon. Many other sites and calculations use CO2 equivalent.

Egypt is one of the countries in Africa with significantly high levels of carbon emissions, which can partly be attributed to the production of gas and oil in the country, coupled with a relatively higher level of industrial activity. In 2018, Egypt was ranked 27th globally for energy-related carbon emissions, having emitted over 250 million tons. This represents about 0.75% of global emissions and 2.5 tons of carbon emissions per capita. Other sources of carbon emissions in the country are transportation, industry and real estate, as well as cement production.[8P Friedlingstein et al, Global Carbon Project Dataset, Global Carbon Budget 2020, Earth System Science Data, 12:4, 2020, 3269–340.] Carbon emission more than tripled from 20.7 million tons in 1990 to 67.7 million tons of carbon in 2019. On the Current Path, carbon emissions are forecast to more than double to 150 million tons by 2043. This may be as a result of the projected growth in the manufacturing sector anticipated within the same period.

Stability scenario

Stability scenario

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development and this would encourage inflows of foreign direct investment (FDI) and improve business confidence. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained here in the thematic part of the website.

General Gamel Abdel Nasser ruled Egypt from independence in 1952 to 1970, when he was succeeded by Anwar Sadat, who was also assassinated in 1981.[9DP Little, Egypt, Britannica.] Sadat’s assassination paved the way for the regime of Hosni Mubarak who ruled the country until his resignation in February 2011 following the Arab Spring in 2010. The Arab Spring was characterised by massive street protests against the Mubarak regime with allegations of corruption, poor governance, poverty and political oppression, among other reasons. Subsequent to the resignation of Mubarak, the Supreme Council of the Armed Forces suspended the constitution, dissolved the People’s Assembly and constituted a transitional body that was to supervise the democratisation process of the country in six months.[10University of Illinois, Arab Spring: Egypt, University of Illinois LibGuides.] The transitional process for a new election was marred by controversy until June 2012 when Mohamed Morsi was declared president. Unfortunately, his regime was truncated in June 2013 when the military intervened and again suspended the constitution.[11S Hamid, Order from chaos: The tragedy of Egypt’s Mohamed Morsi, The Brookings Institution, 19 June 2019.] In 2014, another election was held in which Abdel Fattah al-Sisi was declared winner amidst controversy and allegations of electoral irregularities. Likewise, in 2018, al-Sisi won a controversial second term. A 2019 constitutional amendment extended the tenure of office to six years, though it maintained the two-term limit.

In 2019, Egypt’s score on the governance security index was 0.73, which was slightly above the 0.72 average of lower middle-income countries in Africa. In the Stability scenario, the country’s score is projected to rise to 0.86 in 2043, which is 0.09 points above the Current Path forecast in the same year. Compared to the average of lower middle-income countries in Africa, Egypt’s score in 2043 will be 0.1 higher than the average of lower middle-income countries in Africa.

The GDP per capita for Egypt in 2019 was US$12 426, which was far greater than the average of US$6 989 of lower middle-income countries in Africa. In the Stability scenario, Egypt’s GDP per capita is projected to increase to US$17 429 by 2043, representing an increase of 40% over the period. This projection will be US$414 more than the Current Path forecast in 2043 and US$8 227 above the average of US$9 142 of lower middle-income countries in Africa. The anticipated growth in GDP per capita can be explained by the fact that political stability inspires investor confidence and stimulates domestic and foreign investments, which are essential for economic growth.

As a lower middle-income country, Egypt uses the global benchmark of US$3.20 per person per day. In 2019, the number of poor people living on less than US$3.20 was around 22.3 million, equivalent to about 22.1% of the population. The Stability scenario will reduce the proportion of people living below the poverty line to 10.8% by 2043, which is 0.75 percentage points below the Current Path forecast but 27.5 percentage points below the average of lower middle-income countries in Africa. Also, the number of poor people will decline significantly from 22.3 million people in 2019 to 16 million people by 2043 in the Stability scenario. This means that the materialisation of the Stability scenario could lead to about one million fewer poor people than in the Current Path forecast in 2043.

Demographic scenario

Demographic scenario

This section presents the impact of a Demographic scenario that aims to hasten and increase the demographic dividend through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception. 

The intervention is explained here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the contribution of the size of the labour force (between 15 and 64 years of age) relative to dependants (children and the elderly) as part of the first dividend. A window of opportunity opens when the ratio of the working-age population to dependants is equal to or surpasses 1.7.

In 2019, there was a ratio of 1.6 working-age persons to dependants in Egypt. This is less than the average of 1.32 for lower middle-income countries in Africa. In the Current Path forecast, the country will reach this minimum ratio by 2030. In the Demographic scenario, Egypt is expected to reach this minimum ratio a year earlier compared to the Current Path. By 2043, the ratio of working-age people to dependants is projected to be 2.2 in the Demographic scenario. This is higher than the 1.9 projected in the Current Path and the projected average of 1.6 for lower middle-income countries in Africa.

The infant mortality rate is the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

The infant mortality rate in Egypt in 2019 was 16.7 deaths per 1 000 live births. This figure is far lower than the average of 46.4 for lower middle-income countries in Africa, and it means that Egypt has already attained the SDG Indicator 3.2.2 of reducing under-five mortality to a target of 25 deaths per 1 000 births by 2030. By 2043, the Demographic scenario will lead to a further decline in infant mortality to 8.5 deaths per 1 000 live births, which is 1.4 deaths fewer than the Current Path forecast and 21.2 deaths fewer than the average for lower middle-income countries in Africa.

In 2019, the GDP per capita for Egypt was US$12 426 — far higher than the average of US$6 989 for lower middle-income African countries. By 2043, it is estimated that based on the Demographic scenario, GDP per capita will increase to US$17 571, which is US$556 more than the projected US$17 015 on the Current Path in the same year. Also, this will be US$8 429 more compared to the average for lower middle-income countries in Africa. The additional increase in GDP per capita as a result of the Demographic scenario may be attributed to the decline in population growth as a result of the reduction in fertility rates arising from improved access to contraceptives.

In the Demographic scenario, the number of poor people in Egypt will decline to 14.5 million in 2043, which will be 2.5 million fewer than in the Current Path forecast. Similarly, the proportion of the poor population can be reduced to 10.9% in the Demographic scenario, which is about 1.2 percentage points lower than the Current Path forecast and 27.5 percentage points higher than the average for lower middle-income countries in Africa in 2043. The decline in both the number and portion of poor people in the Demographic scenario compared to the Current Path forecast reflects the decline in the population size as a result of the reduction in fertility rates.

Health/WaSH scenario

Health/WaSH scenario

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which include reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained here in the thematic part of the website.

Egypt’s current health profile largely mirrors that of developed countries. Some of the key accomplishments include a drastic decrease in rates of maternal and infant mortality and chronic malnutrition. The success of Egypt’s long-running reforms has manifested in reduced incidents of communicable diseases, and longer life expectancy, among others. However, Egypt faces a brain drain of medical personnel due to poor working conditions in the country. 

The life expectancy at birth for the average Egyptian was 72.5 years in 2019, which was higher than the average of 67.5 for lower middle-income countries in Africa. This stemmed from the country’s ability to reduce chronic malnutrition and communicable diseases. However, non-communicable diseases such as cardiovascular-related illnesses, stroke, cancer, diabetes and respiratory infections remain a problem in the country.[12Centers for Disease Control and Prevention (CDC), Global Health – Egypt. ] On average, females have a higher life expectancy at birth (75.3 years) compared to males (70 years). In the Health/WaSH scenario, life expectancy is estimated to increase to about 76.9 years by 2043, which is above the Current Path forecast of 76.2 and above the average of 73.3 for lower middle-income African countries. In both the Current Path forecast and the Health/WaSH scenario, females will continue to have a higher life expectancy compared to males, with a difference of about 5 years by 2043.

As noted earlier, the infant mortality rate per 1 000 live births in 2019 was 16.7, below the average of 46.4 for lower middle-income countries in Africa. By 2043, infant mortality per 1 000 live births in the country will be 9.5 in the Health/WaSH scenario and 9.9 in the Current Path forecast, both of which are far lower than the projected average of lower middle-income countries in Africa. This means that the Health/WaSH scenario reduces infant mortality more quickly compared to the Current Path forecast.

Agriculture scenario

Agriculture scenario

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertiliser technology), increased land under irrigation and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained here in the thematic part of the website.

The data on yield per hectare (in metric tons) is for crops but does not distinguish between different categories of crops.

The agriculture sector provides employment to about 28% of the population, 45% of women and 55% of people in Upper Egypt. In 2019, the average yield per hectare for crops was 29.2 metric tons, which was almost four times the average of 5.1 metric tons per hectare for lower middle-income countries in Africa. This means that compared to its income group peers, Egypt has been able to adopt improved technology and mechanised agriculture that significantly increased its yield per hectare. The country has used the Nile river to develop an irrigation system for large-scale mechanised agriculture.[13A Morsy, Egypt’s roads and railways: Powering ahead, ahramonline, 19 February 2021. ] By 2043, the Agriculture scenario will lead to an increase in yield per hectare to 32.2 metric tons, which is higher than the 28 metric tons projected in the Current Path forecast. Projections in both the Current Path and Agriculture scenario will still be higher than the 6.1 projected average of lower middle-income African countries.

The major challenges facing the future of agriculture in Egypt include scanty rainfall, loss of agricultural land to urbanisation and the impact of Egypt’s dispute with Ethiopia over the Nile water upon which it relies for irrigation. There are also climatic factors, such as the flooding arising from the Nile delta, which may constrain agricultural production. The country depends on imports to meet over 40% of its domestic food needs. Egypt is food-sufficient when it comes to commodities like rice, fruits, vegetables, poultry and dairy products; however, commodities such as wheat, lentils, red meat, sugar and oils are mostly imported as domestic demand outstrips local production capacity. For instance, in 2019, Egypt imported US$4.67 billion in wheat, becoming the largest importer of wheat globally. The net agricultural import was 19.2% of agricultural demand in the country in 2019, which was above the average of 13.3% for lower middle-income countries in Africa. Based on the Current Path forecast, import dependence will grow to 40.1% of total demand by 2043. The situation is mitigated in the Agriculture scenario such that by 2043, the country’s net import of agricultural products will be 37.6% of total agricultural demand — slightly above the projected average of 36.8% for lower middle-income African countries.

The agriculture sector accounts for about 12% of GDP in Egypt. The Agriculture scenario is expected to lead to an increase in GDP per capita over the years. By 2043, GDP per capita as a result of the Agriculture scenario will increase from US$12 426 in 2019 to US$17 429, constituting an increase of about 40.3% over the period. This is above the Current Path estimates of US$17 015. In the Agriculture scenario, Egypt’s GDP per capita will be higher than the average of US$9 142 for lower middle-income countries in Africa.

In the Agriculture scenario, about 15.2 million people, representing 10.8% of the population, are projected to live on less than US$3.20 per day by 2043, suggesting that the scenario has a significant effect on poverty reduction in Egypt. This is not surprising given that there are a large number of Egyptians who rely on agriculture as a source of livelihood. Throughout the period, in the Agriculture scenario, the proportion of people living in extreme poverty in Egypt will be lower than the average of 38.3% for lower middle-income countries in Africa. By 2043, the poverty rate in Egypt in the Agriculture scenario will be about 12.1 percentage points below the average for lower middle-income countries in Africa.

Education scenario

Education scenario

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained here in the thematic part of the website.

Egypt has made significant gains in its educational sector; however, there are still challenges. According to World Bank data, the number of out-of-school children increased from 44 389 to 90 674 between 2014 and 2019. Rapid population growth has led to a sharp increase in enrolment at basic and secondary levels due to Egypt’s free and compulsory education for children between the ages of 6 and 15 years. This put pressure on teaching and learning materials particularly in densely populated areas such as Cairo, Alexandria and Giza. As a result, about 30% of school children, particularly in the rural areas, lack learning materials.[14RY Mohamed, Education in Egypt, World Education News + Reviews, 21 February 2019. ] Also, the poor conditions of service and remuneration for teachers in the public sector have caused many to turn to private tutoring to increase their income. 

In 2019, Egypt’s mean years of education was 7.6, which was above the average of 7.2 for lower middle-income countries on the continent. This means that most adults in Egypt have at least primary education. In terms of gender, the mean years of education for males was 8.1, which was 1.1 years more than the average for females of 7 years, meaning that on average, men are more likely to attain an additional 1.1 years of higher education compared to women. This gap in favour of men for mean years of education in Egypt is lower than the average of 1.3 years for lower middle-income countries in Africa. By 2043, in the Education scenario, it is expected that the mean years of education will rise to 9.5 years, which will be 0.2 years more than the Current Path estimates of 9.3 and a year above the average for lower middle-income countries in Africa. Also, based on the Education scenario forecast, the gender gap regarding mean years of education will close by 0.6 years by 2043, while the gender gap closes by 0.4 years for the average for lower middle-income countries in Africa in the same year.

The average test score for primary learners in Egypt in 2019 was 33.6 out of 100, which was on par with the average for lower middle-income countries in Africa. The Education scenario will increase the average test scores for primary learners to 43.7, compared to the Current Path scenario estimated at 37.3. Moreover, the Education scenario for 2043 will result in 8.4 percentage points more than the average for lower middle-income African countries.

In 2019, the average secondary learner test score for Egypt was 44.1 out of 100, which was above the average of 41.7 for lower middle-income African countries. This suggests that Egypt performs relatively better at secondary level than at primary level. By 2043, the average test score for secondary learners in the Education scenario is projected to rise to 54.9, which is 9.3 percentage points above the Current Path estimates of 41.2 and 13.1 percentage points above the average of 41.8 for lower middle-income countries in Africa. At the higher level, aside from low levels of funding, the curriculum has also been criticised for not equipping students with the requisite skills for employment in the job market. The government intends to reform the educational sector by introducing measures that improve teaching and learning conditions to adequately prepare learners for the labour market.

By 2043, the GDP per capita as a result of the Education scenario is estimated to be US$17 538, which is US$523 more than the Current Path forecast of US$17 015 in the same year. Investment in education increases the human capital formation of a country, thereby improving productivity which leads to economic growth. The projected GDP per capita of US$17 538 by 2043 in the Education scenario is above the Current Path forecast average of US$9 142 for lower middle-income countries in Africa in the same year.

By 2043, the number of poor people in the Education scenario will be about 15.5 million, equivalent to 11% of the population. This means that the Education scenario will contribute to reducing the number of poor people by 1.5 million in 2043 compared to the Current Path forecast. Improvement in educational outcomes is a powerful tool for reducing poverty in Egypt. The proportion of poor people based on the Education scenario in Egypt will be 27.3 percentage points lower than the average for lower middle-income countries in Africa by 2043.

Manufacturing/transfers scenario

Manufacturing/transfers scenario

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development, and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues.

The intervention is explained here in the thematic part of the website.

Chart 30 should be read with Chart 8 that presents a stacked area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

In the Manufacturing/Transfers scenario, the absolute contribution of the service sector to GDP will experience the largest improvement compared to the Current Path forecast in 2043, with a contribution to GDP that is US$63.3 billion larger than the Current Path forecast by 2043, while its share in GDP (%) is 0.65 percentage point above the Current Path in 2043. The manufacturing sector, which is the second largest contributor to GDP, is also projected to contribute an additional US$26.7 billion by 2043 compared to the Current Path forecast. However, its share in GDP (%) in the Manufacturing/Transfers scenario is 0.12 percentage point below the Current Path in 2043. The third contributor to GDP in Egypt is ICT, with a contribution of US$10 billion above the Current Path; its share in GDP is 0.09 percentage point above the Current Path by 2043. As a result of structural transformation, the share of the agriculture sector in GDP in the scenario is lower than in the Current Path forecast across the forecast horizon, such that by 2043, it stands at 0.42 percentage point below the Current Path.

Since 2015, as part of its welfare transfers, the Egyptian government has made allocations for subsidies, grants and social benefits to poor households through its conditional cash transfer programmes, Takaful and Karama.[15C Breisinger et al, Egypt’s Takaful and Karama cash transfer program: Evaluation of program impacts and recommendations, IFPRI Policy Brief, 2018.] In the first part of the 2020/21 fiscal year alone, the budget on food subsidies, grants and social benefits amounted to about US$5.4 billion (E£100 billion).[16S Kwasi, J Cilliers and K Yeboua, Race to sustainability? Egypt’s challenges and opportunities to 2050, January 2022.]

In 2019, the total welfare transfers to households in Egypt amounted to US$26.5 billion. This is projected to increase to US$95.7 billion by 2043 in the Manufacturing/Transfers scenario, representing a 260.7% percentage increase over the period. This is higher than the projected US$64.2 billion in the Current Path, meaning that the Manufacturing/Transfers scenario can lead to an improvement in government welfare transfers by an additional US$31.58 billion by 2043 compared to the Current Path.

By 2043, Egypt’s GDP per capita in the Manufacturing/Transfers scenario is forecast to be US$18 203, which will be 7% larger than the Current Path forecast in the same year. This means that by 2043 the additional gains from GDP per capita as a result of the Manufacturing/Transfers scenario will be US$1 188. The GDP per capita for Egypt by 2043 in the Manufacturing/Transfers scenario will be almost twice the projected average of US$9 142 for lower middle-income countries in Africa.

In the Manufacturing/Transfers scenario, the total number of poor people is projected to be around 12 million, constituting 8.5% of the population. This is higher than the projected 17 million people, representing 12.1%, on the Current Path. In other words, the number of poor people in the Manufacturing/Transfers scenario is 5 million fewer than the Current Path forecast in 2043. The implication of this is that investment in research and development, promotion of export and welfare transfers are important means by which Egypt can reduce poverty in the next 24 years. The proportion of poor people in Egypt based on the Manufacturing/Transfers scenario in 2043 will be about 29.8 percentage points below the projected average for lower middle-income countries in Africa.

Leapfrogging scenario

Leapfrogging scenario

The Leapfrogging scenario represents a reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

In 2019, the total number of fixed broadband subscriptions was 6.8 per 100 people, which was above the average of 3.7 for lower middle-income countries in Africa. In the Current Path forecast, fixed broadband subscriptions are projected to rise to 32.7 per 100 people. By 2043, the Leapfrogging scenario will lead to a much greater increase in fixed broadband subscriptions as compared to the Current Path forecast, with a difference of 17.2 subscriptions per 100 people, and the rate of fixed broadband subscription in Egypt will be higher than the average of 26.5 subscriptions per 100 people for lower middle-income African countries.

Mobile broadband refers to wireless Internet access delivered through cellular towers to computers and other digital devices.

Egypt had 63.2 mobile broadband subscriptions per 100 people in 2019, which was above the average of 49.1 for lower middle-income countries on the continent. Between 2024 and 2030, mobile broadband subscriptions in the Leapfrogging scenario will be higher than in the Current Path forecast. However, in the long term, both the Leapfrogging scenario and the Current Path forecast converge to a rate of 153.1 mobile broadband subscriptions per 100 people by 2043, above the average of 147.6 for Africa’s lower middle-income countries.

Egypt has a high electricity access rate with almost the entire population having electricity. Egypt tripled its installed electricity capacity from 15 GW in 2000 to 42 GW in 2017, although this was still not enough to meet domestic electricity demand.[17B Bungane, 200MW PV solar power plant to be constructed in Upper Egypt, ESI Africa, 4 March 2021.] Out of the 42 GW, 91% is made of fossil fuel-based technologies and 8.6% of renewable energy sources, 77% of which is hydropower.[18World Nuclear Association, Nuclear Power in Egypt.] There have been efforts to increase electricity access with the installation of new power plants. By 2018, Egypt had procured three additional power plants that would add an extra 14.4 GW to its power supply.

The number of Egyptians who had access to electricity in 2019 was 100.2 million people, constituting 99.7% of the total population. This is far above the average of 66.3% for lower middle-income countries in Africa. Also, the proportion of urban residents who have access to electricity is almost equal to the proportion of rural dwellers with access to electricity. This suggests that Egypt is one of few countries in Africa that has been able to achieve rural–urban parity in terms of access to electricity. The number of people with access to electricity is projected to increase to 139 million and 139.5 million in the Current Path forecast and in the Leapfrogging scenario, respectively. However, the proportion of people with access to electricity is projected to decline, reaching a minimum of 98.1% in the Current Path forecast and 98.2% in the Leapfrogging scenario in 2033. The expected decline in the percentage of people with access to electricity can be attributed to population growth outpacing electricity generation capacity in Egypt. From 2034, the proportion of the population with access to electricity will begin to rise so that by 2043, 98.9% and 99.2% of the population is projected to have access to electricity in the Current Path forecast and the Leapfrogging scenario, respectively. These are both higher than the projected average of 81.7% for lower middle-income countries in Africa. By 2043, 99.1% and 98.8% of urban dwellers in Egypt will have access to electricity using the Leapfrogging scenario and the Current Path projections, respectively. In the case of rural dwellers, 99.3% and 99% will have access to electricity by 2043 based on the Leapfrogging scenario and the Current Path forecast, respectively.

Egypt’s GDP per capita is projected to increase from US$12 426 in 2019 to US$17 723 in 2043 based on the Leapfrogging scenario. This represents an increase of US$708 compared to the Current Path forecast in 2043. This will still be above the average of US$9 142 for lower middle-income countries in Africa. Increased access to broadband increases productivity by reducing transaction costs and optimising supply chain with a positive effect on economic growth.

In the Leapfrogging scenario, the number of poor people in 2043 is projected to be 14.9 million (10.6% of the population). This projection is lower than the 17 million people estimated in the Current Path forecast in the same year, which suggests that the number of poor people in the Leapfrogging scenario is about 2.1 million fewer than the Current Path forecast in 2043. The projected poverty rate in the Leapfrogging scenario is 27.7 percentage points lower than the projected average for lower middle-income African countries in 2043.

Free Trade scenario

Free Trade scenario

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Area (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained here in the thematic part of the website. 

The trade balance is the difference between the value of a country's exports and its imports. A country that imports more goods and services than it exports in terms of value has a trade deficit, while a country that exports more goods and services than it imports has a trade surplus.

Like many African countries, Egypt is a net importer of goods and services. According to data from the Observatory of Economic Complexity, the country’s total export volume for 2019 was US$36.7 billion, which was far lower than its imports of US$82.5 billion. In 2019, Egypt’s trade deficit represented 9.8% of GDP, which was higher than the average of 6.6% of GDP for lower middle-income African countries. The country’s main exports are petroleum products, gold and nitrogenous fertiliser, while its imports include refined petroleum, wheat and cars. From 2024 to 2037, the Free Trade scenario leads to a quicker improvement in trade balance compared to the Current Path forecast, reaching a peak of a surplus of 3.9% of GDP in the Free Trade scenario and 0.5% of GDP in 2032 before declining. From 2038, the trend reverses so that by 2043, the Current Path forecast leads to a deficit of 4.3% compared to the 8% in the Free Trade scenario. This suggests that the full implementation of the AfCFTA can lead to a positive trade balance in Egypt in the short term. However, in the long term, intense competition from other African countries will reduce Egypt’s exports while imports will increase as a result of free trade. It may also be that Egypt will find it more profitable to import certain commodities that it initially produced under the AfCFTA. By 2043, Egypt’s trade deficit in the Free Trade scenario will be 4.8 percentage points of GDP higher than the average of 3.3 for lower middle-income African countries on the Current Path.

The GDP per capita for Egypt is estimated to increase to US$18 116 by 2043 in the Free Trade scenario, which is US$1 101 more than the projections on the Current Path in 2043. This means that the full implementation of the AfCFTA and improved trade among African countries can lead to higher economic growth and productivity in Egypt. Furthermore, the GDP per capita for Egypt in the scenario will be almost twice the projected average of US$9 142 for lower middle-income African countries.

From 2027 to 2036, the Current Path forecast leads to a much quicker reduction in poverty compared to the Free Trade scenario. However, from 2037, the Free Trade scenario will lead to a greater reduction in both the number and proportion of poor people compared to the Current Path forecast. By 2043, the number of people living below the poverty line of US$3.20 in the Free Trade scenario will be about 14.6 million people (10.4% of the population). This is 1.7 percentage points lower than the Current Path forecast, meaning that the Free Trade scenario has 2.4 million fewer poor people than in the Current Path forecast by 2043. The proportion of poor people projected in the Free Trade scenario will be lower than the average of 38.3% for lower middle-income countries in Africa. The full implementation of the AfCFTA will improve growth and reduce poverty in Egypt; however, it will increase the short- to the medium-term poverty rate. This is because the implementation of the AfCFTA will lead to creative destruction where the inefficient firms are kicked out of markets (collapse) under intense competition. This will lead to job losses and poverty unless the government responds with a safety net programme. In the long term, as the efficient firms grow with the trade opportunities, the unemployment rate declines, and so does the poverty rate.

Financial Flows scenario

Financial Flows scenario

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries, and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows to middle-income countries. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained here in the thematic part of the website.

The total amount of aid received by Egypt is significantly low. Foreign aid received by Egypt in 2019 was equivalent to 0.5% of GDP (US$1.5 billion), which is far lower than the average of 1.7% for lower middle-income countries in Africa. The main donor of foreign aid to Egypt over the years has been the US. For instance, in 2020, Egypt received a total of US$1.4 billion from the US, mainly from the US Agency for International Development (USAID), Department of Agriculture and the US Trade and Development Agency (USTDA).[19American Chamber of Commerce in Egypt, Egypt-US business relations.] Both the absolute value of foreign aid and aid as a percentage of GDP are projected to decline in both the Current Path forecast and in the Financial Flows scenario, such that from 2028, the country will receive almost no foreign aid in both. The decline in foreign aid to Egypt reflects the fact that donors prioritise poor low-income countries.

Egypt is one of the leading destinations of FDI in Africa. Between 2001 and 2019, Egypt’s net FDI inflows topped the continent and ranked third in comparison with other Arab countries.[20H Ghoneim, Egypt emerges as a top FDI destination, 6 December 2021.] In 2019, FDI flows to Egypt amounted to 3.5% of GDP, above the average of 2.6% for lower middle-income African countries. The increased FDI inflow was as a result of the gains in achieving macroeconomic stability that boasted investor confidence in the economy. A significant proportion of the FDI into the country is channelled into the oil and gas sectors although some other sectors such as telecommunication and real estate also receive some amount of FDI. For instance, in 2011, the oil sector and gas sector accounted for 70% of FDI in Egypt. By 2043, it is projected that the total FDI to the country will be about 3.9% of GDP in the Current Path forecast. In the Financial Flows scenario, FDI is projected to increase to about 4.5% of GDP in 2043, which is above the projected average of 3.5% for lower middle-income countries on the continent.

Remittances are the second largest source of income to Egyptians households. In 2019, the total value of remittances flows to Egypt amounted to US$11.4 billion, which constituted 3.3% of GDP. This was higher than the average of 2.6% for lower middle-income African countries. Both the absolute value of remittance and remittances as a percentage of GDP are projected to fall over the forecast period. In the Financial Flows scenario, remittances are projected to fall to US$7.3 billion, representing 0.72% of GDP, which will be below the average of 2% of GDP for the average lower middle-income country. Remittances will decline quicker in the Current Path forecast, such that by 2043, the total value of remittances in the country will be about US$4.6 billion, representing 0.47% of GDP.

Egypt’s GDP per capita is estimated to increase to US$17 364 by 2043 in the Financial Flows scenario, representing an increase of US$349 over the Current Path projection in the same year. This estimate is also above the average of lower middle-income countries in Africa, which is projected to be US$9 142 by 2043, suggesting that increases in remittances, aid and FDI inflows can enhance economic growth in Egypt.

Trade openness will reduce poverty in the long term after initially increasing it due to the redistributive effects of trade. Most African countries export primary commodities and low-tech manufacturing products, and therefore a continental free trade agreement (AfCFTA) that reduces tariffs and non-tariff barriers across Africa will increase competition among countries in primary commodities and low-tech manufacturing exports. Countries with inefficient, high-cost manufacturing sectors might be displaced as the AfCFTA is implemented, thereby pushing up poverty rates. In the long term, as the economy adjusts and produces and exports its comparatively advantaged (lower relative cost) goods and services, poverty rates will decline.

Based on the Financial Flows scenario, the total number of people projected to live below the poverty line of US$3.20 is about 15.9 million in 2043 (11.3% of the total population). This estimate constitutes a reduction of about 1.2 million people, equivalent to 0.83 percentage points, compared to the Current Path in the same year. It is also lower than the projected average of 38.3% for lower middle-income countries in Africa in 2043.

Infrastructure scenario

Infrastructure scenario

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in low-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries.

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables are part of the Leapfrogging scenario. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including those supporting health, sanitation and ICT. 

The intervention is explained here in the thematic part of the website.

In 2019, 100.2 million people in Egypt (99.7% of the population) had access to electricity. From 2031, every resident in Egypt is projected to have access to electricity in the Infrastructure scenario. The country will also achieve rural–urban parity in terms of electricity access from 2031. The Current Path forecast will also increase electricity access to about 98.9% of the population. Electricity access to rural dwellers will be slightly higher than urban dwellers, with a difference of about 1 percentage point in the Current Path forecast. These projections in both scenarios significantly exceed the projected averages for lower middle-income countries in Africa.

Indicator 9.1.1 in the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

Accessibility to rural areas is important in spurring the socio-economic development of a country and improving the living standards of rural dwellers. In 2019, 83.5% of all rural dwellers in Egypt resided within 2 km from an all-weather road — significantly above the average of 61.4% for lower middle-income African countries. In the Infrastructure scenario, this is expected to rise to 93.6% by 2043, slightly above the Current Path forecast of 92.9% and the average of 67.8% for lower middle-income countries in Africa.

Egypt’s GDP per capita is estimated to rise to US$17 222 by 2043 in the Infrastructure scenario. This is US$207 more than the Current Path forecast in the same year, and also above the average of US$9 142 for lower middle-income countries in Africa. Increased investment in infrastructure improves connectivity and reduces transaction costs, positively affecting productivity and growth.

By 2043, the proportion of the poor population is expected to decline from 22.1% in 2019 to 11.7% in 2043 in the Infrastructure scenario, corresponding to 16.5 million poor people in 2043. In the Infrastructure scenario, the number of poor people in 2043 is 560 000 fewer than the Current Path forecast for the same year. The poverty rate in the scenarios in 2043 will be lower than the estimated average of 38.3% for lower middle-income countries in Africa.

Governance scenario

Governance scenario

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption, and hence improves the quality of service delivery by government.

The intervention is explained here in the thematic part of the website.

As defined by the World Bank, government effectiveness ‘captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies’.

Chart 51 presents the impact of the interventions in the Governance scenario on government effectiveness.

In 2019, Egypt’s score for government effectiveness was 1.85, which was slightly below the average of 1.89 for lower middle-income countries in Africa. In both the Current Path forecast and in the Governance scenario, government effectiveness is projected to increase across the forecast horizon, although the increase in the Governance scenario is higher (at 2.52) than in the Current Path forecast — an increase of 0.15. Egypt has a higher score in government effectiveness compared to the average of 2.3 for lower middle-income countries in Africa.

In the Governance scenario, Egypt’s GDP per capita is projected to increase to US$17 505 in 2043, which is US$490 more than the estimates in the Current Path forecast. It is also higher than the average of US$9 142 for lower middle-income countries on the continent in the same year, suggesting that good governance in the forms of reducing corruption and improvements in quality of service delivery and accountability can stimulate economic growth and increase income levels. Authorities in Egypt should therefore make efforts to improve governance.

The proportion of people living below the poverty line of US$3.20 is expected to decline to 11.2% in 2043 in the Governance scenario, which is lower than the 38.3% average for lower middle-income African countries. This figure corresponds to about 1.3 million fewer poor people than in the Current Path forecast of 17 million poor people for 2043.

Impact of scenarios on carbon emissions

Impact of scenarios on carbon emissions

This section presents projections for carbon emissions in the Current Path for Egypt and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

The total amount of carbon emitted by Egypt in 2019 was 67.7 million tons. Egypt’s carbon emissions are projected to increase in all the scenarios with total carbon emissions estimated to be around 616 million tons by 2043. The intervention with the greatest impact on carbon emissions is the Manufacturing/Transfers scenario with 157.2 million tons of carbon in 2043. This is closely followed by the Free Trade scenario with projected carbon emissions of 156.8 million tons in the same year.

Combined Agenda 2063 scenario

Combined Agenda 2063 scenario

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The synergistic effect of all the scenarios on GDP per capita is estimated to be about US$523 in 2043. The scenario with the greatest impact on GDP per capita by 2043 is the Manufacturing/Transfer, followed by the Free Trade scenario. On the other hand, the scenarios with the least impact on GDP per capita are the Health/WaSH and Agriculture scenarios. This suggests that in the long term, the Free Trade and Stability scenarios have the greatest potential to improve human and economic development in Egypt.

Whereas Chart 55 presents a stacked area graph on the contribution of each scenario to GDP per capita as well as the additional benefit or synergistic effect, Chart 56 presents only the GDP per capita in the Current Path forecast and the Combined Agenda 2063 scenario.

Egypt’s GDP per capita is estimated to increase to US$23 511 by 2043 in the Combined Agenda 2063 scenario — US$6 496 more than in the Current Path forecast. Moreover, Egypt’s GDP per capita in the Combined Agenda 2063 scenario will be more than double the projected average of US$9 142 for lower middle-income countries in Africa in 2063. The Combined Agenda 2063 scenario shows that a policy push across all the development sectors is necessary to achieve sustained growth and development in Egypt.

In the Combined Agenda 2063 scenario, the number of poor people will significantly decline such that by 2043, only 4.1 million Egyptians (3% of the population) will be living below the poverty line of US$3.20. This means that the Combined Agenda 2063 scenario has 12.9 million fewer poor people than in the Current Path forecast in 2043. The extreme poverty rate in Egypt in the Combined Agenda 2063 scenario will be 34.2 percentage points lower than the projected average of 38.3% for lower middle-income African countries by 2043.

See Chart 8 to view the Current Path forecast of the sectoral composition of the economy.

In the Combined Agenda 2063 scenario, the biggest contributors to GDP in the long term will be the service, manufacturing and ICT sectors, respectively. In the Combined Agenda 2063 scenario, the contribution of the service sector to GDP is US$380.2 billion, or 6 percentage points of the GDP, larger than in the Current Path forecast in 2043. The absolute contribution of the manufacturing sector to GDP is US$91.3 billion larger than in the Current Path forecast in 2043. However, its share in GDP (%) is 3.5 percentage points below the Current Path forecast. The ICT sector is projected to contribute about US$55.5 billion, which corresponds to 0.6 percentage point of GDP above the Current Path in 2043. The agriculture sector’s share in GDP in the Combined Agenda 2063 scenario is 1.7 percentage points lower than the Current Path forecast in 2043.

The estimated GDP (MER) in the Combined Agenda 2063 scenario in 2043 will be about US$1.5 trillion, representing an increase of 335.6% over the 24-year period. In 2043, the GDP of Egypt in the Combined Agenda 2063 is US$535.7 billion, equivalent to 54.5% more than the Current Path forecast of US$983.8. The Combined Agenda 2063 scenario shows that a policy push across all the development sectors is necessary to achieve sustained growth and development in Egypt.

The total amount of carbon emitted in Egypt in 2019 was 67.7 million tons. In the Combined Agenda 2063 scenario, the total carbon emissions are projected to rise to 176.5 million tons by 2043, representing an increase of about 160% over the period — 150 million tons higher than in the Current Path forecast in 2043. The materialisation of the Combined Agenda 2063 scenario would stimulate high economic growth in Egypt, but the cost in terms of environmental degradation would be high. To mitigate the environmental impact of the Combined Agenda 2063 scenario, its implementation should be accompanied by concrete steps to accelerate the energy transition.

Endnotes

  1. H Sayed, Trends of Fertility Levels in Egypt in Recent Years, UNFPA.

  2. International Monetary Fund, Arab Republic of Egypt: Fifth review under the extended arrangement under the extended fund facility-press release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt, 10 October 2019.

  3. Urbanet, Urban development in Egypt – Infographics, 22 October 2019.

  4. DP Little, Egypt, Britannica.

  5. M Soliman, Egypt’s Informal Economy: An Ongoing Cause for Social Unrest, SIPA, Journal of International Affairs, 29 October 2020. 

  6. World Bank, Egypt: World Bank Issues Brief – No. 2, Informal is the new normal, Egypt’s Informal Sector is on the Rise, but careful Regulatory Innovation Can Help Turn the Tide. 

  7. A Ismail, The Power Generation Crisis in Egypt, [email protected], 3 September 2014.

  8. P Friedlingstein et al, Global Carbon Project Dataset, Global Carbon Budget 2020, Earth System Science Data, 12:4, 2020, 3269–340.

  9. DP Little, Egypt, Britannica.

  10. University of Illinois, Arab Spring: Egypt, University of Illinois LibGuides.

  11. S Hamid, Order from chaos: The tragedy of Egypt’s Mohamed Morsi, The Brookings Institution, 19 June 2019.

  12. Centers for Disease Control and Prevention (CDC), Global Health – Egypt. 

  13. A Morsy, Egypt’s roads and railways: Powering ahead, ahramonline, 19 February 2021. 

  14. RY Mohamed, Education in Egypt, World Education News + Reviews, 21 February 2019. 

  15. C Breisinger et al, Egypt’s Takaful and Karama cash transfer program: Evaluation of program impacts and recommendations, IFPRI Policy Brief, 2018.

  16. S Kwasi, J Cilliers and K Yeboua, Race to sustainability? Egypt’s challenges and opportunities to 2050, January 2022.

  17. B Bungane, 200MW PV solar power plant to be constructed in Upper Egypt, ESI Africa, 4 March 2021.

  18. World Nuclear Association, Nuclear Power in Egypt.

  19. American Chamber of Commerce in Egypt, Egypt-US business relations.

  20. H Ghoneim, Egypt emerges as a top FDI destination, 6 December 2021.

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Cite this research

Enoch Randy Aikins (2022) Egypt. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/geographic/countries/egypt/ [Online Resource] Updated 24 August 2022.