As Egypt navigates a period of economic recalibration, questions loom large over its reform trajectory, investment climate, and capacity to harness its demographic dividend. Inflationary shocks, external vulnerabilities, and uneven growth have tested the country’s resilience, but they have also underscored the urgency of deep structural transformation. In this exclusive conversation with Business Monthly, Dr. Mahmoud Mohieldin—UN Special Envoy on Financing Sustainable Development, former Minister of Investment, and a seasoned economist—offers a candid assessment of Egypt’s economic landscape. Drawing on his policy experience and international development work, Dr. Mohieldin outlines a reform blueprint rooted in macroeconomic discipline, export-led private-sector growth, digital innovation, and inclusive investment. With insight spanning from COP27 to youth employment, from public-private partnerships to green transformation, Dr. Mohieldin lays out a pragmatic yet ambitious vision for sustainable progress—one that seeks to unlock Egypt’s true growth potential in a challenging global environment.

Business Monthly: How do you assess Egypt’s current economic landscape, and what structural reforms are most critical to stabilizing the economy and unlocking sustained growth?

Dr. Mahmoud Mohieldin: Inflation in Egypt has surged to historic highs, while economic growth has lagged behind potential. Following the turbulence of 2022 and 2023, projections for 2025 show real gross domestic product (GDP) growth at around 4%, with potential to exceed 5%. Inflation, though expected to ease to 16% in FY 2024–25, remains elevated. This imbalance highlights the urgent need for structural reform and stronger monetary-fiscal coordination.

The deeper issue is what I call Egypt’s economic myopia. As I’ve argued in a recent book and an upcoming Harvard publication, we must distinguish between challenges and crises: Egypt has a challenge in imports but a crisis in exports; a challenge in investment but a crisis in savings; and a challenge in public spending but a crisis in public revenue.

To address these gaps, the focus should shift to boosting exports, enhancing domestic resource mobilization—particularly through better tax policy—and prioritizing effective public spending. Egypt needs a private-sector-led growth model, centered on small and medium enterprises (SMEs), scalable enterprises, and profitable business lines, while reducing unnecessary state intervention.

What’s needed is a new growth strategy that is export-oriented, inclusive, green, and powered by digital transformation. Investment should target human capital—especially education and health—and infrastructure via public-private partnerships. I propose five strategic pillars: the IMF’s 3 Ds—Digitalization, Diversification, Deregulation—plus Demographics and Data. These will be key to unlocking Egypt’s long-term potential.

Business Monthly: What key policy actions are needed to restore investor confidence in Egypt and attract sustained private capital?

Mohieldin: Level the playing field. This is what we need—for competition, paying taxes, labor laws, consumer protection, regulatory compliance, land access, and fair credit conditions. I emphasize strong development in project preparation. Egypt has 18,000+ opportunities for bankable, green, smart projects across the 27 governorates. These projects highlight opportunities in SMEs, large enterprises, women-led ventures, community development, and startups, especially in smart, digital, AI-driven, and sustainability sectors. Investments must be localized. Most capital has gone to a few big cities and industrial zones. But localization and diversification—mandated to local authorities—can truly help Egypt move forward.

Business Monthly: How effective have government efforts been in reducing the economic footprint of state-owned entities and promoting a more competitive, private-sector-driven economy?

Mohieldin: As a former Minister of Investment, I encouraged private-sector participation. My view is: let’s be practical. Let’s draw a line and level the playing field regardless of ownership—public or private, domestic or external. I’m not thrilled with the transactional approach of offering a few companies for sale. It depends too much on market timing. Egypt has stronger potential in greenfield investments and private listings.

Business Monthly: Following Egypt’s leadership role in COP27, how effectively has the country integrated climate resilience and sustainability into its broader development strategy?

Mohieldin: Egypt made a strong impact hosting COP27, particularly by advancing the Sharm el-Sheikh Adaptation Agenda, which emphasized resilience in infrastructure, health, water systems, coastal protection, and agriculture. A new nationally determined contribution (NDC) is expected by COP30 to guide climate policy, alongside an investment strategy focused on greening the economy. The priority now is to fully integrate climate action into development planning, moving beyond the false dichotomy between growth and sustainability. Energy reform supports SDG7, while adaptation aligns with SDG2, SDG6, and others. Achieving this vision requires inclusive growth, driven by public-private partnerships (PPPs) and greater localization. Egypt’s pipeline of over 18,000 green and smart investment opportunities across its 27 governorates highlights the potential for transformative, community-driven development.

Business Monthly: Given that Egypt’s youth are a crucial driver of future growth, what strategies should be implemented to equip them for evolving labor markets and promote more inclusive economic opportunities?

Mohieldin: The traditional model of growth—based on labor, capital, land, and entrepreneurship—is no longer sufficient. Today, ideas, innovation, and people, especially the young and educated, are the true drivers of progress. Egypt holds a demographic advantage over aging societies like Japan, Russia, and parts of Europe, with youth possessing immense creative and adaptive potential.

Yet this potential remains underutilized. While infrastructure investment has been vital, the next phase must focus on quality education and healthcare—our real engines of growth.

It’s also concerning that women, despite educational gains, are losing ground in workforce participation, and those who are employed often face wage inequality. Unlocking inclusive growth means closing gender gaps, reducing youth unemployment, and expanding localized investment in human capital, digital infrastructure, and real economic opportunities for both women and young men.

Business Monthly: Do you have any final insights or messages you’d like to share with our readers?

Mohieldin: Given today’s complex geopolitical landscape—regionally across the Mediterranean, Middle East, Arab world, and Africa—Egypt holds a significant opportunity. With its economic diversity, natural endowments, and, most importantly, its people and demographic dividend, the country is well-positioned for high growth.

If Egypt puts its macroeconomic house in order, invests adequately in health, education, digital transformation, infrastructure through PPPs, and strengthens economic resilience, I would be even more optimistic about its growth potential.

Egypt can and should grow beyond 7% annually in the coming years. That kind of growth will restore lost incomes, especially for the middle class, and—most importantly—restore hope.