Private businesses now account for around 60% of Egyptian investment as Cairo seeks to reduce the state’s economic role. The next test is whether private capital can build higher-value digital industries while ensuring that citizens with limited digital skills are not left behind.
Egypt’s private sector now accounts for around 60% of investment, Finance Minister Ahmed Kouchouk said after meeting Prime Minister Mostafa Madbouly, as the government seeks to shift more of the burden of economic growth from the state to private capital.
The figure is broadly consistent with the direction of official data. Private investment rose 24.2% year on year in the third quarter of FY2024/25 and reached 62.8% of total investment, according to Finance Ministry data.
The government’s FY 2025/26 development plan targets EGP1.94tn in private investment, equivalent to about 63% of the total, against EGP1.16tn from the public sector. The plan explicitly links the ceiling on public investment to fiscal discipline and creating more room for private businesses.
Kouchouk’s 60% figure therefore points less to a sudden breakthrough than to a deliberate rebalancing of investment.
That transition matters. After years in which large public projects drove capital formation, Egypt increasingly needs businesses to finance factories, tourism capacity, telecommunications networks, data centres and export-oriented industries.
Investors See an Improving Economy
Kouchouk said international investors had renewed confidence in Egypt’s economic direction and pointed to investment-risk assessments at their lowest level since 2014. He also highlighted stronger activity in manufacturing, telecommunications, information technology and tourism.
The broader economic picture lends support to the government’s confidence narrative, but with important qualifications.
The IMF said in July that Egypt had entered the latest period of regional instability from a stronger macroeconomic position, supported by growth and improved external buffers. Yet it also identified high public debt, large financing requirements and the state’s sizable economic footprint as continuing vulnerabilities.
That distinction matters for investment.
Financial investors can return relatively quickly when exchange rates, yields and sovereign risk improve. Factories, data centres and export businesses require longer commitments and confidence in regulation, financing and the operating environment.
Egypt’s harder test is whether improving financial confidence becomes productive private capital.
Technology Becomes an Investment Test
For Egypt’s digital economy, that question is particularly important.
Kouchouk identified telecommunications and information technology among the sectors showing strong activity, alongside manufacturing and tourism. He has also pointed to opportunities to expand service exports using Egypt’s young workforce.
Digital services offer an attractive economic proposition. Software, outsourcing and other services delivered electronically can generate foreign currency without depending on the same volume of physical inputs and shipments required by many traditional exports.
Egypt has advantages: a large graduate population, relatively competitive labour costs, multilingual capabilities, proximity to European and Gulf markets and extensive international telecommunications connections.
These have helped establish the country as an outsourcing and technology-services base.
But the next stage is harder.
Egypt needs to move further from selling relatively low-cost labour towards exporting technology, engineering expertise and intellectual property.
That means expanding beyond call centres and conventional business-process outsourcing into software engineering, artificial intelligence, cybersecurity, cloud services and other higher-value digital activities.
And those industries require capital.
The digital economy may appear weightless, but the infrastructure behind it is not.
Data centres require land, power and cooling. AI requires costly processors and high-performance computing. Cloud services depend on resilient networks, while digital finance requires secure identity, payments and cybersecurity infrastructure.
Government can provide regulation and enabling infrastructure, but much of the investment required to scale data centres, cloud capacity, AI computing and export-oriented technology companies will ultimately have to come from private capital.
The investment challenge is therefore becoming more demanding: can Egypt turn its cost and talent advantages into scalable companies, technological infrastructure and intellectual property as the digital economy becomes increasingly capital-intensive?
The Digital Divide
Infrastructure, however, is only one side of Egypt’s digital challenge.
World Bank data indicate that about 75% of Egypt’s population uses the internet. That represents a substantial expansion of connectivity, but also means access is not universal. More importantly, internet access should not be confused with the ability to navigate increasingly complex financial, tax, healthcare or government platforms.
The International Telecommunication Union describes inadequate digital skills as one of the key barriers preventing people from fully benefiting from information and communications technology. Its framework treats ICT skills as distinct from simple internet access, covering areas ranging from information literacy and online communication to digital security.
That distinction will become increasingly important for Egypt over the coming decade.
As banking, taxation, payments, healthcare and government administration move online, citizens with limited digital skills could face higher barriers to essential services even as those services become faster for digitally capable users.
Egypt therefore faces two digital transitions at once.
It needs advanced skills to support software, AI, cybersecurity and digital exports. But it also needs broader basic digital capability so that technological progress does not create a new barrier between citizens who can navigate digital systems and those who cannot.
Digital literacy should consequently be viewed increasingly as part of the infrastructure of a digital economy.
One option would be to expand free basic digital-skills programmes through schools, universities, libraries, youth centres and other public facilities, focusing on practical tasks such as accessing government platforms, electronic payments, online banking and cybersecurity.
Banks, telecom operators and technology companies also have an economic interest in such programmes. Greater digital capability expands the addressable market for the services they provide.
Digital First Should Not Mean Digital Only
Training, however, cannot eliminate every barrier.
Some citizens will continue to struggle with digital services because of age, disability, education, affordability or lack of access to suitable devices.
A sustainable transition therefore requires an assisted-digital model alongside digital-first government.
Citizens unable to complete online tax, licensing, property or other essential procedures should still be able to obtain free assistance through government service centres, post offices or accredited community access points, subject to appropriate identity, privacy and security safeguards.
The objective should not be to preserve parallel paper bureaucracies indefinitely. It should be to ensure that efficiency gained through digitisation does not come at the cost of access.
Essential public services can become digital without making digital competence a condition for receiving them.
This principle is already relevant to the Finance Ministry’s own reforms.
Kouchouk said the ministry is expanding specialised tax-service centres and developing faster digital services. The new Real Estate Transactions application, for example, allows citizens to register transaction details, upload documents, pay applicable taxes and obtain clearance electronically.
The application illustrates the potential productivity gains from digitisation. But it also highlights the appropriate benchmark for digital government.
Success should not be measured simply by how many services move online. It should be measured by whether digitisation reduces the time and cost of dealing with government, can be used easily by ordinary citizens and retains accessible assistance for those who cannot use it independently.
Egypt’s long-term approach should therefore be digital by default, but not digital only.
The 60% Is a Milestone, Not the Finish Line
There is also an important counterweight to the government’s investment narrative.
The IMF said in July that Egypt’s efforts to reduce the state’s role and create more room for private investment, including through its divestment programme, had “progressed more slowly than anticipated and need to be accelerated.” It called for more decisive implementation of the State Ownership Policy, faster divestments and stronger governance of state-owned enterprises.
Its latest detailed assessment similarly identifies reducing the state footprint and supporting private-sector growth as essential reforms.
Kouchouk’s 60% figure should therefore be viewed as progress rather than completion.
The next test is not simply whether private businesses provide 60% or even two-thirds of Egypt’s investment. It is where that capital goes and what it produces.
For the digital economy, that means whether private investment can build data infrastructure, software, AI and cybersecurity capabilities and generate higher-value exports — while giving citizens the skills and support needed to participate in an increasingly digital economy.
If Egypt can combine private capital, digital infrastructure and broader digital inclusion, the current investment shift could begin to change not only who finances growth, but what the economy produces, what it exports and who participates in it.
Related news:
The Maintenance Economy: The Industry Egypt’s Infrastructure Boom Is Creating
Egypt Retains Africa’s Second-Largest Economy Ranking as Reforms Strengthen Outlook
Read also:
Saab’s GlobalEye Platform Gains Global Momentum as NATO, Middle East Drive Demand
Egypt’s €690mn Grid Upgrade Lays Groundwork for European Power Exports
