Egypt has managed to reduce unemployment to the lowest level ever recorded in its history despite facing economic challenges. According to World Bank data, the proportion of Egyptians who are unemployed but ready and looking for work decreased from 7.1% in the first quarter of 2023 to 7% in the following quarter, a decrease of 0.1%.
However, according to the Egyptian Central Agency for Public Mobilization and Statistics (Capmas), the unemployment rate increased from 7.2% in the third quarter of 2022 to 7.4% by the end of the year.
The labor force increased by 1.3% in the second quarter of 2023, reaching 30.969 million people, up from 30.571 million in the previous three months, according to the Capmas report. The urban labor force comprised 13.375 million people while the rural labor force was 17.594 million people. The labor force consisted of 25.514 million men and 5.455 million women.
The increase in the labor force was responsible for the 400,000 increase in employment over the last three months.
According to its spokesman, Abdel Wahab Khader, the Ministry of Labor has taken several measures to tackle unemployment. He explained to DevelopmentAid that the main priority was to protect existing jobs and prevent workers from becoming unemployed. He also revealed that the government allocated 5 billion Egyptian pounds to support irregular workers during the pandemic, including 1.8 billion Egyptian pounds for irregular workers affiliated with the Ministry of Labor, and 1.6 billion Egyptian pounds for employees who did not receive their salaries, particularly in the tourism sector.
“The ministry has assisted 11,000 people with disabilities in finding jobs in the private sector since the beginning of the year,” Khader said, adding that the Ministry of Labor has employed 28,000 people with disabilities over the last ten years.
He added that the ministry has established 75 vocational training centers, both fixed and mobile, to offer free courses for young people in basic skills such as plumbing, electricity, sewing, and embroidery.
Dr. Mohamed Al-Bahwashi, a Professor of Economics at Suez University, said that national infrastructure projects had played a key role in reducing the impact of the economic and human resources crises that could have led to high unemployment. He added that these projects improved the economic performance and competitiveness of Egypt and drew more investments to different sectors.
According to him, national projects absorbed many workers, including those who had been laid off in other sectors, and this helped to keep Egypt’s unemployment rate stable. He also stated that the expansion of Egypt’s non-oil exports and manufacturing industries boosted industrial production activity and created more jobs.
Al-Bahwashi said that the Egyptian citizen’s culture of accepting any job even if it was not related to their academic field of study, with the aim of securing a living income, also contributed to stabilizing the employment rates in general.
He emphasized that while national projects employed many people, they were unable to hire all those who had graduated making it necessary for the private sector to provide a wider range of job opportunities. Al-Bahwashi went on to say that the government is currently concentrating on boosting the participation and economic contribution of the private sector.
A report from the Information and Decision Support Center, part of the Council of Ministers, highlighted the impact of major national projects on the labor market. These projects, led by the state in various sectors, are labor-intensive and create many jobs. For example, in the agricultural sector, the New Delta project has cultivated 669 thousand feddans (a feddan equals 0.42 hectares) out of a proposed 2.8 million and will generate about 5 million direct and indirect jobs by 2025. Other projects include the Toshka project with 180,000 feddans out of 1.1 million, and the Sinai Peninsula Development Project with 285,000 feddans out of 1.1 million.
Al-Bahwashi said that the unemployment rate in 2023 will be the lowest in more than three decades based on a long-term analysis. He attributed the recovery of the Egyptian economy from the 1990s to 2010 to debt relief, a surge in tourism, higher earnings from the Suez Canal, and increased money transfers from Egyptians living abroad. These factors led to a 7.2% economic growth rate in 2008, he added.
However, this did not translate into lower unemployment rates which remained high at 8-11% during that period. He named this stage “Jobless Growth” where economic growth did not equally benefit the labor markets. He attributed this to the mismatch between education and training outputs and labor market needs which pushed people towards the informal sector.
The period from 2011 to 2014 witnessed a decline in the Egyptian economy due to internal turmoil. The growth rate dropped to 1.8% which affected the employment situation and pushed the unemployment rate to 13% in 2013. The private sector was hesitant to engage in economic activities because of the uncertainty of the future, the poor infrastructure, and the unfavorable business environment.
