Third Fiscal Consolidation, Sustainable Energy & Competitiveness DPF

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The development objectives of the Third Fiscal Consolidation, Sustainable Energy, and Competitiveness Programmatic Development Policy Financing Project for Egypt are built around three pillars: (1) advance fiscal consolidation through higher revenue collection, greater moderation of the wage bill growth, and stronger debt management; (2) ensure sustainable energy supply through private sector engagement; and (3) enhance the business environment through investment laws, industrial license requirements as well as enhancing competition. The government’s reform efforts are focusing on pressing macroeconomic challenges, where they have already delivered some visible results, and on bolstering social protection measures to protect the poor and vulnerable from the negative effects of the broader macroeconomic reforms. The government’s evolving development model increasingly shifts the focus toward the private sector as the engine of growth and job creation. In the industrial sector, the government has launched a sweeping reform of the archaic industrial licensing regime, which dates back to 1954, introducing risk-based licensing, new controls, and service standards to this historically complex area of business regulation. The reforms in the energy sector are closely aligned with Egypt’s contribution to the Paris Agreement on climate change. The program contributes to renewing Egypt’s social contract through the promotion of transparency and inclusive growth. This approach is consistent with the World Bank Group’s Middle East and North Africa strategy, which aims to renew the social contract. Overall, the programmatic series has already yielded substantial results and is bringing about important structural changes in the economy.