Chairperson of the Agricultural Bank of Egypt (ABE) Elsayed Elkosayer stressed that the results of the economic reform programme exceeded all expectations of success in a very short period of time.
Elkosayer told Daily News Egypt that our national economy is now much stronger as a result of the government reforms and the bold decisions that have been made. Egypt is now more attractive to foreign investments. It is expected that these investments will increase further after the issuance of the executive regulations of the investment law.
He also stressed that the banking system is strong and has liquidity that meets the needs of various projects, but we need to increase the savings rates so that we can increase the rate of investment.
Between 2016 and 2017, the government has taken several measures under the economic reform programme. What is your assessment of these measures?
The reform measures taken by the government come within the framework of its national task to correct the course and revive the Egyptian economy.
The results of these reform measures have exceeded all expectations of success in a very short period of time, with the testimony of many international financial institutions, including the World Bank, the International Monetary Fund (IMF), and the international rating agencies.
For example, the foreign exchange reserves of the Central Bank of Egypt (CBE) jumped for the first time in years to more than $36 billion, in addition to the remarkable stability in the exchange rate and the improvement of the Egyptian pound against foreign currencies. In addition to increase of cash flows in banks, the elimination of the black market for currency trading, and the rise of foreign investments to historical figures.
In order to reach a growth rate of 5 or 6%, investment rates must rise above 20%. To increase the investment rate, the savings rate must increase, and thus there have been measures to enhance saving rates, which has recently occurred.
How do you see the current situation of the Egyptian economy?
Our national economy is now much stronger as a result of the government reforms and bold decisions taken.
Egypt has achieved great successes in several major projects, including the New Suez Canal, the giant road network that was inaugurated, major investment projects such as the one and a half million acre project, the Marsa Matrouh project, and the national project for social housing.
Egypt is now more attractive to foreign investments, as evidenced by the rise in foreign investments in the recent period, and investments are expected to rise further during the coming period, following the issuance of the executive regulations of the investment law.
Additionally, the Egyptian market will be a strong destination for European investments under the global acclaim of the reform programme and the country’s economic development.
But there are those who suffer because of these procedures?
It is natural that the measures taken by the government regarding the economic reform programme cause crises, and we emerged from these crises easily and in a very short period of time, and now we have started to reap the benefits of those measures.
It is no secret that the Egyptian people have many, many, and the president has thanked more than once for his patience and endure those difficulties. There is a strong awareness of the Egyptians in the actions taken, and without popular support for decisions, we would not have succeeded.
If we compare ourselves to the challenges we faced, we must look at the neighbouring countries. We find that Egypt is a stable country politically, security wise, and economically. We are in complete stability compared to the neighbouring countries.
In your opinion, what activities or projects can help the Egyptian economy move quickly?
There are major projects being set up that will have a major impact on the economy.
The most important of these projects are the development of the Suez Canal axis, the New Administrative Capital, the Golden Triangle Economic Zone, the development of the North Coast, the cultivation of 1.5 million acres, the technology valley, the road projects, the electricity projects, and other large projects that absorb large employment and alleviate the unemployment crisis, which have a significant impact on GDP.
What role can banks play in helping the Egyptian economy to rise?
I always emphasise that the banking system is a powerful device, that has the liquidity to meet the needs of different projects, expertise, and competencies.
Nonetheless, we need to increase savings rates so that we can increase investment profiles, and the banking system, with the confidence gained over the past years, is able to attract more savings.
What about the role of the Agricultural Bank, which it heads in serving the economy?
It is enough that the bank can access its services to 50% of the Egyptian people. The number of the bank’s customers now reaches about 2 million. The number of farmers and farmers is about 6 million, in addition to temporary agricultural labour estimated at 4 million. Millions of people belong to the agriculture sector.
If we assume that each of the 10 million counts between 4 and 5 people, this means that the bank can extend its services to about 40 or 50% of the population of Egypt if it is activated and played better.
We are currently preparing the bank’s infrastructure so that it can participate in the initiatives of the Central Bank of Egypt, which is launching from time to time to stimulate the economy, especially the small and medium enterprise (SME) financing initiative.
In the past, the bank focused its activities on a range of services in the context of its interest in farmers and Egyptian farms, such as agricultural loans and products for the food sector, like the Al-Batelu project, as well as services related to agriculture-related industries.
In the next stage, we hope to develop these products and the variety of services offered by the bank and its agricultural company to maximise their role in the field of service to the Egyptian farmer, and thus the Egyptian economy as a whole, especially under the bank’s network of 1,210 branches spread across the country. Thus, the spread is achieved that is not enjoyed by any other bank in Egypt.