Ziad Bahaa El-Din, former deputy prime minister of Egypt, said in an article in the Financial Times that the Egyptian government is required to adopt a comprehensive economic reform program and follow up on its implementation, to convince international rating agencies and skeptical international investors to change the situation for the better, and to bring their attention to Egypt.
Bahauddin added that the government had already announced a comprehensive package of measures encouraging investment, including reducing bureaucratic obstacles, providing guarantees for fair competition with the state, and clarifying tax details.
Those measures were positive and welcome, but changing the course of the economy would require much more measures and decisions than simply facilitating the issuance of permits or the provision of tax exemptions.
Fitch downgraded Egypt's credit rating for the first time in a decade, partly because the government did not pass radical reforms, the country's high external debt requirements, restrictions on access to finance, and deteriorating public debt "measures."
Bahauddin said that the justifications cited by the government in its opposition to the Fitch report to explain the economic crisis, such as the repercussions of the Covid-19 pandemic and Russia's war on Ukraine, are no longer acceptable to most analysts and independent observers.
They expressed concern about the continued denial of other major causes of the crisis, such as excessive spending on long-term infrastructure projects, the lack of rationalization of domestic and international borrowing, the unprecedented growth of state intervention in the economy, and the existence of a powerful bureaucracy, he said.
He stressed that acknowledging the mistakes of previous policy is a necessary condition for embarking on the desired comprehensive reform, developing an economy that has officially witnessed inflation of up to 40%, a boom in the black market in the field of currency, and import restrictions that have damaged productive capacities, while debt, which has reached dangerous levels, burdens the state.