Egypt has been ranked the 119th most competitive nation globally, falling one place from the previous year, according to the latest report released by the World Economic Forum (WEF).
The report conducted by the WEF, ranks nations by a set of performance indicators which evaluates a country’s ability to provide suitable infrastructure for investments and welfare to its citizens.
Egypt was out ranked by countries such as Cameroon at 116, Guyana at 117 and Ethiopia at 118.
The next nearest Arab state is Lebanon at 113, Tunisia at 87, Algeria at 79, and Morocco at 72.
The report noted that some North African Economies, such as Egypt and Tunisia, are slowly stabilizing and are starting to focus on economic reform.
The fragile security situation is improving slightly although tenacious political and policy instability are undermining the country’s competitiveness and its growth potential going forward, the report revealed.
Investor confidence needs to remain the priority while regaining political stability, it added.
The report added that establishing confidence through a credible and far-reaching reform program is vital to Egypt’s future and to realizing the considerable potential of its large market size and proximity to key global markets.
According to the GCI, three areas are of particular importance. First, the macroeconomic environment has deteriorated over recent years to reach 141st position mainly because of a widening fiscal deficit, rising public indebtedness, and persisting inflationary pressures.
In the WEF view, A credible fiscal consolidation plan, accompanied by structural reforms, will be needed in Egypt. This may prove difficult because of energy subsidies that account for a considerable share of public expenditure. Removing these subsidies may be difficult politically, but there is space for targeting subsidies better in a way that allows for fiscal consolidation while still protecting the most vulnerable.
Another area of importance, according to the report, measures to intensify domestic competition (118th) would result in efficiency gains and contribute to energizing the economy by providing access to new entrants. This, in turn, would make the country’s private sector more dynamic, thus fostering the creation of new jobs. And third, making labor markets more flexible (130th) and efficient (139th) would allow the country to increase employment in the medium term and provide new entrants to the labor market with enhanced opportunities.