CAIRO: The new Cabinet led by Prime Minister Ibrahim Mahlab will be unable to raise growth rates to four percent due to several challenges including security and presidential elections, economists told Youm7 Monday.
Mahlab should prioritize restoring stability and security, resolve the financial demands of workers and holding presidential elections safely, said economic expert Passant Fahmy.
It is “absurd” to talk about growth rates under the current crisis, Fahmy said, adding that the government must acknowledge the difficulty of attracting major investments.
“Saudi Arabia provided Egypt with U.S. $100 million for small and micro-enterprises. Where has this money gone and why did the Social Fund not work properly until now?” Fahmy asked.
Former Minister of Finance Ahmed Galal first headed the ministry with a budget deficit of 140 billion EGP ($20.1), and by the time he left office the deficit had amounted to 198 billion EGP, Fahmy added.
Economist Mostafa al-Nasharty told Youm7 that the former Cabinet failed to reach a four percent growth, and that the new Cabinet would not be able to achieve over one percent of growth.
“One of the reasons the Cabinet would fail” is that Mahlab integrated several ministries, which would “distract ministers and impede them from accomplishing anything tangible,” Nasharty said.
The former Cabinet “wasted 40 million EGP granted by Saudi Arabia to pay dues to contractors and foreign oil companies,” and therefore Saudi Arabia ceased financial grants to Egypt and decided to provide aid in the forms of petroleum products and electricity and silos projects, Nasharty said.
Nasharty also said the six Cabinets that had assumed power since the January 25 Revolution borrowed to manage the country instead of producing anything, leading to a budget deficit increase from 10 to 14 percent.
Economic expert Ahmed Qoura told Youm7 that he does not expect positive steps from the new Cabinet because 20 ministers from the old Cabinet maintained their positions.
All ministers are not competent enough except Mahlab, who was wrong to hold on to ministers from the old Cabinet which remained in power for seven months without any clear achievements, Qoura said.
“If there had been competent officials in the old Cabinet, they would not have fallen into the trap of the minimum wage law and the workers’ continuous problems,” Qoura added.
Egypt is in “dire need” for industrial, real estate and agricultural projects to employ youth, Qoura said.
Originally published in Youm7.