Ready to be stimulated: Egypt's first stimulus package projects 'almost done'
Many of the first stimulus package’s projects are expected to be finalised before 30 June, while the rest will be completed by the end of 2014, Minister of Planning and International Cooperation Ashraf El-Araby told the Daily News Egypt Sunday.
The minister pointed out that by the end of April 60% of the first stimulus package projects, which started in November, was completed.
El-Araby, who was attending the United States Chamber of Commerce’s “Unleashing of the potential of the private sector in Developing Egypt” press conference, added that this is a good percentage under the circumstances in the country.
The minister mentioned that road and infrastructure projects have been constructed in Alexandria, Damietta and Ismailia, adding that “you [the public] should not just mentor the progress made in Cairo.”
Following up on the implementation of the government’s economic stimulus plan, El-Araby plans to inspect the sites of the involved projects this week, said head of the of the Public Relations department of the ministry Magdy Youssef Saturday.
The interim government’s stimulus plan, which was said to span between six to nine months starting from late August 2013, amounts to EGP 29.6bn ($3.2 billion) and aimed at generating 3% economic growth over the fiscal year 2013/2014.
The government failed to meet the scheduled time for concluding the projects as the funds allocated for the plan have been held in the National Investment Bank (NIB) for several months, economic and banking expert Bassant Fahmy commented.
The funds for the government’s investment projects have to be held in the state-owned NIB at first, to be distributed later to contractors for implementing the projects, Fahmy explained.
Former spokesman of the cabinet Hany Salah said in February that the projects’ implementation rates “were not as hoped” due to the unrest in Egypt after 30 June.
The projects of the first stimulus package involved strengthening electricity grids, the completion of 17 road projects to link all governorates, finishing the construction of 50,000 residential units, reclaiming 32,600 agriculture acres and purchasing 600 buses for public transportation running on natural gas, which will decrease energy subsidies granted by the government, along with other projects.
El-Araby mentioned that 50,000 residential units would be delivered in November and December “with utilities”, describing this as a “great achievement”, adding that the public buses, the blue buses, started to appear and spread throughout Greater Cairo.
According to the last reports from the planning ministry, the government delivered natural gas to 340,000 residential units, out of the 800,000 target, reformed 150 railway crossings, concluded 14 road projects and constructed 11 water and sanitation stations throughout Egypt, until the end of January.
In March, El-Araby said that the government has spent 40% of the budget allocated for the implementation of the plan, calling for a faster implementation of projects in order to generate revenues in the current fiscal year.
The first package is financed by a $9bn (nearly EGP 60bn) deposit in the Central Bank of Egypt, put together after the Gulf War in the 1990s, former Minister of Finance Ahmed Galal said in December.
The second stimulus package, valued at EGP 30bn, was announced in December. Focusing on development projects, the package is mostly funded by a $2.8bn (nearly EGP 20bn) aid package from the United Arab Emirates, while the remaining EGP 10bn will be funded by the government’s savings, according to the finance ministry.
Regarding investments, during the first quarter of the 2013/2014 fiscal year, the value of local investments reached EGP 36bn, while new foreign direct investment (FDI) registered $1.3bn, former Minister of Investment Osama Saleh said in February