Dr. Rania Al-Mashat:
Report Provides an Analytical Vision of Opportunities and Challenges in Egypt's SME and Startup Sector
The Ministerial Group for Entrepreneurship Coordinates Among Various Stakeholders to Encourage Startups and Overcome Challenges to Foster Knowledge-Based and Innovation-Driven Growth.
Mr. Bassel Rahmy: We Are Working in Cooperation with Relevant Authorities to Activate the Report's Recommendations and Update the National SME Strategy.
In cooperation with the Egyptian government, the Organisation for Economic Co-operation and Development (OECD) launched a comprehensive report assessing the reality of small and medium-sized enterprise (SME) and entrepreneurship policy in Egypt. This report was released as part of the Country Programme for cooperation between Egypt and the OECD.
The report aims to provide a precise analytical vision of the opportunities and challenges facing SMEs and entrepreneurs in Egypt, in addition to offering a set of recommendations based on international standards and best practices from countries with successful experiences applicable in the Egyptian context.
H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, explained that the report highlights the significant potential of the entrepreneurship, startup, SME, and micro-enterprise sectors in Egypt. It also reflects the government's efforts to transform into a competitive, innovation- and knowledge-based economy.
H.E. Dr. Al-Mashat emphasized the importance of cooperation with the OECD within the framework of the Country Programme by preparing diagnostic reports that showcase the capabilities of the Egyptian economy and provide numerous recommendations that drive economic development.
H.E. Minister Al-Mashat commended the continued constructive cooperation within the framework of the Country Programme between Egypt and the OECD, which has been extended until 2025. This program serves as a fundamental pillar of joint cooperation, acting as a vital tool to integrate international expertise into Egypt's national development strategy, especially "Egypt Vision 2030" and the National Structural Reforms Program. The program includes 35 projects distributed across five main axes, designed through an extensive participatory process, reflecting Egypt's commitment to policy coherence and adopting reforms that align with the national reform agenda.
H.E. Dr. Al-Mashat also pointed to the role played by the Ministerial Group for Entrepreneurship, in coordination with various relevant national authorities, to encourage an environment of innovation and entrepreneurship and support startups. This is achieved by studying various challenges facing the sector and working to overcome them. She noted that the Startup Charter has been finalized and will be launched soon, in addition to a package of anticipated facilities for the sector.
In this context, Mr. Bassel Rahmy, CEO of the Micro, Small, and Medium Enterprises Development Agency (MSMEDA), stated that the report comes within the framework of Egypt's Country Programme, which is conducted under the patronage of the Ministry of Planning, Economic Development and International Cooperation, in coordination with MSMEDA and in cooperation with the OECD.
This initiative aims to implement the entrepreneurship and SME project, which includes preparing a report on "Review of SME and Entrepreneurship Policy Frameworks in Egypt, with a focus on two axes: financial and technological services and digital transformation."
This was done in consultation and partnership with relevant stakeholders.
The report contained a detailed analysis of the current performance of projects and key national initiatives, in addition to analyzing sectoral gaps and formulating and presenting recommendations that would develop and enhance the project and entrepreneurship sector according to international best practices.
The report indicated the importance of the project sector in Egypt, as it represents 90% of the activities of the Egyptian economy.
Mr. Rahmy pointed out that MSMEDA, in cooperation with the Ministry of Planning, Economic Development and International Cooperation, seeks to update the National Strategy for Micro, Small, and Medium Enterprises and Entrepreneurship. This strategy will activate the recommendations included in the report and put them into effect in coordination and partnership with all local and international development partners.
The report indicated that Egypt, as the most populous country in the Middle East and North Africa (with over 110 million people), possesses a vast market and significant entrepreneurial potential. It also noted that the Egyptian economy, despite global challenges, has been among the fastest-growing in the region over the past five years.
The report clarified that Egypt Vision 2030 gives special attention to the development of SMEs and innovative startups, and to enhancing the role of the private sector. This aligns with global trends towards a knowledge-based, innovation-driven, and entrepreneurial economy.
The report also outlined the significant potential of the SME sector in Egypt, as it represents more than 90% of economic activity in Egypt, with the majority of projects concentrated in the trade and services sectors. It underscored that despite the high number of public startups in entrepreneurship, there is a gap that needs to be addressed by encouraging innovation, increasing productivity, and transitioning from the informal to the formal sector.
The report added that despite significant investments in education and scientific research, and a boom in venture capital, some challenges still face small businesses. It emphasized the importance of continuing recent efforts to simplify procedures, improve the business climate, and enhance competition.
The report also touched on the launch of the Ministerial Group for Entrepreneurship, which coordinates government efforts in implementing policies supporting startups, helping them access international markets, and linking the innovative solutions offered by these companies to sectoral challenges. It also noted the coordinating role of MSMEDA among government entities for sector development.
The report stressed the importance of elevating decentralization policies that consider geographical differences among governorates, by designing local programs that account for spatial disparities. It also praised the level of digital transformation in Egypt and recommended developing a national strategy for digitizing small businesses, including providing tax incentives and encouraging digital transformation.
In the field of financial technology, the report called for establishing a tiered licensing system for fintech companies, expanding the base of digital payments, and integrating digital financing tools into general business policies.
The report concluded with several key recommendations, including developing a comprehensive annual database on the performance and characteristics of small businesses and entrepreneurship, adopting an "SME impact test" before approving any new legislation, reviewing and simplifying old laws, establishing an independent mechanism to monitor the implementation of the SME law and prepare annual reports with the participation of relevant authorities, providing tax incentives for venture capital, developing a strategy for women's entrepreneurship in cooperation between MSMEDA and the National Council for Women, boosting the efficiency of incubators by setting national standards for accreditation and evaluation, and strengthening the role of the Credit Guarantee Company (CGC) and increasing its capital to expand the scope of guarantees granted to micro-enterprises.
It is worth noting that Egypt recently assumed the co-chairmanship of the OECD's Middle East and North Africa (MENA) Initiative on Governance and Competitiveness for Development for the period 2026-2030, alongside Italy and Turkey. During her participation in the OECD Ministerial Council meetings in Paris earlier this June, H.E. Dr. Rania Al-Mashat met with Mr. Mathias Cormann, the OECD Secretary-General, to discuss ways to enhance cooperation between the two sides and follow up on the implementation of the Country Programme.