Institutional Review of the National Institute for Governance and Sustainable Development in Egypt

1. Navigating the Egyptian landscape for good governance and sustainable development

Abstract

This chapter explores the challenges and advancements in Egypt’s journey towards sustainable development and good governance, underpinned by Egypt Vision 2030. It discusses Egypt’s demographic and fiscal pressures, and the trajectory of reforms to governance and public administration. The chapter highlights the NIGSD’s role in fostering efficiency, accountability and competitiveness within a complex institutional landscape and Egypt’s ongoing commitment to the SDGs.

A challenging context for promoting and supporting the development of good governance for sustainable development

The NIGSD operates in a challenging context for promoting and supporting the development of effective governance to achieve sustainable development. Egypt has set ambitious development goals and agenda through Egypt Vision 2030. The strategy recognises the importance of a modern and efficient public administration to fulfil its goals. In that regard, several challenges prevail in Egypt’s public administration for advancing at the planned path towards sustainable development such as the low effectiveness and large size of the public sector, the uneven awareness of sustainable development across the administration, and limited fiscal capacity in a context of competing goals and priorities. The dynamic demographics of Egypt also add to these challenges in terms of ensuring the access and quality of public services, measures, and policies to a large population.

Supporting Egypt’s progress towards reaching the Sustainable Development Goals

Egypt Vision 2030 has developed a vision for Egypt that aims to guide SDG efforts in the country:

The Vision aspires for Egypt, by 2030, to evolve into a competitive, well-balanced, and diversified economy, anchored in innovation and knowledge, and grounded in justice, social inclusion, and participation, with a balanced and diversified ecosystem to achieve sustainable development and improve the quality of life of Egyptians, without compromising the rights of future generations.

Egypt has advanced in a number of crucial development areas including reducing poverty, granting access to key infrastructure and utilities and enhancing education, that can help contribute to reaching the sustainable development goals. For instance, the share of population living in extreme poverty decreased from 6.2% in 2017-2018 to 4.5% in 2019-2020 according to a Central Agency for Public Mobilisation and Statistics (CAPMAS) study (State Information Service, 2021[1]), and has been further decreasing to 2.5% in 2023 according to the Sustainable Development Report data (Sachs, J.D., Lafortune, G., Fuller, G., Drumm, E., 2023[2]). As of 2023, close to 50% of the SDGs were achieved or on track for completion. However, the country ranks only 81th in the 2023 Sustainable Development Report, and significant efforts are still needed to reach the SDGs by 2030, including on SDG 17 that relates to Peace, Justice and Strong Institutions (Sachs, J.D., Lafortune, G., Fuller, G., Drumm, E., 2023[2]).

Additionally, the country’s high population growth rate represents an additional challenge for the country’s development and for reaching its planned sustainable goals. In 2023, Egypt’s population amounted to around 113 million (United Nations Population Fund, 2023[3]) and according to current projections is expected to double by 2080. In the last five years, the population has grown every year by 1.7% on average (OECD, 2024[4]). This outlook represents a major challenge to the State’s development efforts, as a higher population will likely result in a larger labour force participation contributing positively to the development of the country but can pose a serious challenge to achieving sustainable development goals.

Fostering good governance and the fiscal space to support sustainable development

While Egypt has put in place an institutional framework and implemented the Public Administration Reform Plan (PARP) to improve its public administration and achieve its planned policy outputs, particularly the realisation of the UN’s Sustainable Development Goals, specific challenges persist in its effective implementation across the public administration hindering the achievement of strategies such as Egypt Vision 2030. The Reform Plan lacks critical elements to provide a clear transformation strategy of the public administration such as the absence of data, evidence and quantitative/qualitative targets supporting objectives, and the lack of an action plan acting as a roadmap for attaining the planned objectives, including roles and responsibilities for all actors, starting with the NIGSD (OECD, Forthcoming[5]). More fundamentally, the agenda on public governance reform should be more closely linked to Egypt’s broader ambitions on sustainable development.

Fostering good governance and the efficiency of the public administration are crucial to NIGSD’s agenda and to reaching the objectives of Egypt Vision 2030. Egypt's public sector is acknowledged for its considerable size and offers opportunities for enhancing effectiveness. Egypt scores 35.58 on government effectiveness in the Worldwide Governance Indicators, compared to the MENA region scoring 42.35 on average (World Bank, 2021[6]). Public sector employment represented an estimated 22% of total employment in 2019, while this fraction amounted to 18.6% on average across OECD countries in 2021, reflecting a higher prevalence of jobs driven by the public sector in Egypt than in OECD countries (World Bank, 2016[7]; OECD, 2023[8]). In addition, trends reveal that Egyptian women are more present in the public sector than in the private sector. While optimising the number of civil servants has been recognised as a key reform priority by successive governments, the large size of the public sector in the labour market has led to complex processes, creating burdens and inefficiencies for both the public and private sectors as well as for citizens. This has also led to additional pressures on public finances, particularly in the current poly-crisis context (OECD, Forthcoming[5]).

Similarly, Egypt’s financial capacity to mobilise resources and address sustainable development goals has been increasingly challenged as Egypt’s fiscal space has tightened in the last few years. Public debt relative to GDP has risen in the last years with high levels of public deficit. Since 2019, public debt as a percentage of GDP has risen from 80% to 88% in 2022 and is forecasted to reach 93% in 2023 mainly to deal with the impacts of the COVID-19 crisis. Simultaneously, the public deficit has been high in recent years amounting to 6% of GDP in 2022. Nonetheless, both fractions are forecasted to improve in the coming years (IMF, 2023[9]). A plausible rise in public expenditure to mitigate the negative impacts of the war, particularly high inflation, might pose additional concerns for fiscal sustainability and represent a challenge for implementing the SDS (OECD, 2023[8]).

Enhancing competitiveness to support economic growth and sustainable development

Enhancing competitiveness is a crucial challenge for Egypt’s economic development that can help increase investment, boost economic growth, create jobs and economic opportunities, and ultimately improve the lives of citizens. Boosting competitiveness is identified as a key objective in Egypt Vision 2030 (Egypt's Ministry of Economic Development and Planning, 2023[10]) (OECD, 2024[4]). Egypt has notably improved in the Global Competitiveness Index since the first edition of the Index in 2016, ranking 93^rd in 2020 compared to 115^th in 2016, with key strengths identified in infrastructure and market size (World Economic Forum, 2020[11]). The capacity to attract Foreign Direct Investments (FDIs) and the complexity and diversification of the economy are among the key drivers for enhancing competitiveness. Egypt has carried out a number of important reforms to support FDI attraction and diversification, through amendments of the Investment Law, new incentives for investors and developing zone-based policies and public-private partnerships (OECD, 2024[4]) (OECD, 2020[12]). FDIs flows to Egypt have been significantly increasing since 2011 and have doubled to USD 11bn in 2022 compared to 2021, surpassing pre-crisis levels (UNCTAD, 2023[13]). Egypt’s ranking in the Economic Complexity Index has remained stable over the past year and stands at 67^th out of 144 countries in 2021 (Harvard Growth' Lab, 2023[14]). The country can further improve its competitiveness particularly in areas related to institutions and competition, digitalisation, labour market and innovation (OECD, 2020[12]) (World Economic Forum, 2020[11]) (Egypt's Ministry of Economic Development and Planning, 2023[10]).

Opportunities for advancing sustainable development and public governance

Egypt’s institutional and regulatory context on public governance and sustainable development is framed by such key actors as the Ministry of Planning, Economic Development and International Cooperation (MPEDIC), the Central Agency for Administration and Organisation (CAOA), Sustainable Development Units in ministries, SDG focal points in ministries, Strategic Management Units (SMUs) in ministries, Governance and Internal Audit Units in ministries and key strategies and reform plans such as the Egypt Vision 2030, the PARP, and the anti-corruption strategy 2023 - 2030. Within this context, the NIGSD aims to disseminate knowledge/skills and provide advice to develop effective and accountable systems of governance for sustainable development – the institute’s mandate, roles, activities, and structure will be analysed with detail in the next chapter.

The institute is a unique public economic organisation in the Egyptian institutional landscape on sustainable development and public governance, with a mandate seeking to enhance Egypt’s progress and performance with respect to governance, sustainable development, and competitiveness. It is headquartered in Cairo and operates under the supervision of the Minister of Planning, Economic Development and International Cooperation (MPEDIC) and governed by a Board of trustees, headed by the Minister (NIGSD, 2020[15]). It is the only institute for governance and sustainable development in the MENA region, and its uniqueness stems from its structure and service provision, i.e., a public economic organisation with a para-public management structure, as well as governmental and non-governmental external clients, as well as from its combination of interconnected topics around governance, competitiveness, and sustainable development (while other organisations might address those issues separately). The NIGSD stands at a crucial intersection where it can lend support to various organisations in different ways. It collaborates with MPEDIC regarding the Sustainable Development Strategy, CAOA on matters of public governance, and works alongside the public governance units within line Ministries. Additionally, it plays a role in supporting different agencies and institutes, such as the Administrative Control Authority (ACA), particularly in addressing public integrity and anti-corruption issues.

MPEDIC supports and coordinates with NIGSD operations and its Minister chairs the Board of Trustee, thus providing strategic guidance. The Ministry plays a leading role in policymaking, achieving the SDGs and long-term planning, designing evidence-informed policies via effective planning, monitoring and evaluation, alongside managing public investments towards a knowledge-based and competitive economy in partnership with the private sector and civil society. Inter alia, MPEDIC develops long, medium and short-term sustainable development plans and ensures consistency of the implementation of sectoral strategies and plans with the development strategy and the budget; implements and monitors public policies; proposes policies to improve the competitiveness of the economy; and proposes draft laws and decrees to enhance economic development (MPED, 2023[16]).

MPEDIC has also formulated and monitors the implementation of the Egypt Vision 2030 in co-ordination with line ministries and stakeholders. The Vision was launched in 2016 to promote sustainable development and enact a specific set of public policies to reach concrete climate, social and economic goals by 2030. It is the first Egypt’s strategy of this kind and acts as the governing framework for all development programmes and projects that are to be pursued through 2030. MPEDIC is the institution at the centre of government (CoG) mandated to steer and coordinate the implementation of the Egypt Vision 2030 using a whole-of-government approach and leads the strategy updates as well. Since 2016, the SDS has been through an updating process that was recently finalised in order to integrate growing socio-economic challenges such as climate change (e.g., growing water scarcity), high population growth and rising inflation (see Box 1.1) (OECD, Forthcoming[17]). In addition, MPEDIC also monitors the implementation of the UN 2030 Agenda for Sustainable Development and ensures compliance with the 2063 African Agenda (MPED, 2023[16]).

Box 1.1. The updated Egypt Vision 2030

The updating process was based on a participatory approach led by a task force that brought together all relevant stakeholders and actors led by government entities, representatives from the private sector and civil society, and a group of experts and academics from various disciplines. This task force identified a set of key factors crucial to the updating process by monitoring the current situation regarding the implementation of the Vision. These factors include the need to emphasize the interdependence of the dimensions of sustainable development (i.e., economic, social, and environmental); improve monitoring practices; concentrate on several pressing matters that the State has identified as having the utmost strategic significance (i.e., population growth, climate change, water scarcity etc.); improve response speed tackling emerging global challenges; and emphasize the significance of the Vision’s versatility and adaptability.

As a result, the updated version of Egypt’s Vision 2030 presents:

• Four guiding principles: Putting the Citizen at the Core and Centre of Development; Guaranteeing Equity and Accessibility for All; Improving Resilience and Adaptation; and Strengthening Sustainability.

• Seven enablers for attaining sustainable development and achieving the goals by 2030: financing, technology and innovation, digital transformation, data availability, legislative environment, supportive cultural values, and population growth management.

• Six strategic objectives: improving Egyptians’ quality of life and raising their living standards; achieving social justice and equality; reaching an integrated and sustainable environmental system; promoting a competitive and diversified knowledge economy; strengthening a well-developed infrastructure; and enhancing governance and partnerships.

• Thirty-two complementary and interdependent sector-based goals to achieve the six strategic sustainable development objectives in Egypt.

Source: (OECD, Forthcoming[17]).

Additionally, Sustainable Development Units and SDG focal points or strategic management units (SMUs) in line ministries play a relevant role in the institutional landscape of sustainable development in Egypt. These units and focal points have been set-up in ministries to enhance inter-institutional co-ordination and are designed to serve as key contacts for raising awareness on SDGs, ensuring that sustainable development strategies within their own entities are aligned with the Egypt Vision 2030 and to facilitate the co-ordination and monitoring process led by MPEDIC. However, at the time of drafting this review they have not been yet streamlined and are not uniformly integrated into the structures of all ministries, with only 4 ministries having established them (MPEDIC - for both its planning and international cooperation functions, the Ministry of Tourism, the Ministry of Education and Technical Education, and the Ministry of Environment), which can make the work and co-ordination on reaching SDGs across the public administration more challenging (OECD, Forthcoming[17]). MPEDIC also seeks to push the boundaries of international cooperation with multilateral and bilateral development partners, governments, the private sector and civil society, to support the national development agenda in line with the SDGs (MPEDIC, 2024[18]). MPEDIC also plays a key role in monitoring ODA-financed projects and ensuring alignment with the SDGs through a systematic monitoring process, through its ODA-SDG mapping exercise and the implementation of the Framework for International Cooperation & Development Financing. This Framework focuses on maximizing socio-economic returns from ODA and aligning development interventions with national and SDG objectives in Egypt.

Lastly, these whole-of-government long-term strategies cannot be reached without a fit-for-purpose public administration that has the capacities to deliver public policies, services and outcomes for citizens. Thereby, CAOA plays a key role as well in advancing towards sustainable development, as it is the leading institution in charge of public administration reform and training. CAOA has been responsible for civil service management and public administration reform. Currently, the Agency leads three broad work areas: implementation and supervision of the PARP; public employment; and the reallocation to the New Capital from a civil service perspective. It develops, reviews, and supports the implementation of the PARP by all line ministries through its different units with expertise on the pillars of the PARP. The main objective of the PARP is to build “an efficient, effective, competent, transparent, fair and responsive governmental administrative body that provides high-quality services, maintains accountability, increases citizens’ satisfaction, and contributes significantly to the realisation of the national development goals and improvement of the country status” (Egypt's Ministry of Planning, Monitoring and Administrative Reform, 2017[19]) (see Box 1.2) (OECD, Forthcoming[5]). While the objective clearly links public administration reform and sustainable development, the PARP has not fully reached its objectives and its ultimate contributions to sustainable development goals remain to be assessed. Through its activities, the NIGSD has already been active in supporting the implementation of several of the objectives of the PARP on public administration effectiveness and on competencies and capacity building for civil servants.

The Public Governance Review of Egypt (PGR) (OECD, 2024[20]), conducted within the framework of an EU-funded project, focuses to a considerable extent on relations across the government on strategic planning and public administration initiatives, and the roles played by MPEDIC, CAOA and the NIGSD, and argues in favour of a more systematic, formal cooperation and co-ordination between these three institutions on matters of mutual concern relating to the implementation of Egypt Vision 2030. Indeed, the PGR recommends the codification of this inter-institutional cooperation using such tools as a formal Memorandum of Understanding (MoU) that would outline roles, responsibilities, and deliverables in such areas as indicator development, strategy alignment across policy areas, research, and training in sustainable development policymaking and practices. This approach of MoUs has been implemented between MPEDIC and NIGSD and can be extended into new areas and replicated throughout the administration on sustainable development objectives. This is discussed in Chapters 3, 4, 5 and 6 below.

Box 1.2. The Public Administration Reform Plan (2014)

The Reform Plan was explicitly developed to increase the effectiveness of the public administration in Egypt and respond to key contemporary challenges such as the complex organisational structure of the public administration, the large number of regulations and their overlap, or the lack of transparency and accountability. In particular, the PARP was built around five pillars containing each several results, objectives, and actions:

1. Increasing the effectiveness of the public administration through institutional reforms, including by restructuring and reorganising government agencies and Ministries through the creation of new units;

2. Developing public administration and civil servant’s capabilities to increase civil service performance and develop their competencies;

3. Strengthening the legal framework for civil service reform and management through legislative reforms to develop a conducive and well-defined legal framework for the public administration that would increase its agility and support the leadership’s capacity to manage and deliver;

4. Improving and digitalising government services to serve citizens better, enhance the interactions between citizens and the public administration, and enhance the digitalisation and functioning of the public administration;

5. Improving the governance and the legal framework for Information and IT systems in order to better develop, manage and connect databases across the public administration.

Source: (Egypt's Ministry of Planning, Monitoring and Administrative Reform, 2017[19]).

CAOA is also leading the implementation of Governance and Internal Audit units within line ministries. These units aim to improve the internal governance and audit of public bodies across the public administration. According to decision No. 54 of 2020, every ministry, governmental body, local administration, and public agency must take the necessary steps to establish organisational units for internal audit and governance within their organisational structure. Overall, they aim to (1) ensure the effective allocation of the body’s funds and resources; (2) assure the effectiveness of administrative, financial, and technical procedures; (3) enhance the adherence to binding legislation, regulations, instructions, policies, and plans; (4) promote the principles of good governance and apply the values and standards of internal auditing; and (5) contribute to strengthening the efforts of the State agencies concerned with preventing corruption.

References

[10] Egypt’s Ministry of Economic Development and Planning (2023), Egypt Vision 2030, revised version.

[19] Egypt’s Ministry of Planning, Monitoring and Administrative Reform (2017), National Public Administration Reform Plan (NARP), revised version.

[14] Harvard Growth’ Lab (2023), Economic Complexity Index, last accessed on 6 October 2023, https://atlas.cid.harvard.edu/rankings.

[9] IMF (2023), Country statistics, https://www.imf.org/external/datamapper/profile/EGY.

[16] MPED (2023), Vision and Mission, https://mped.gov.eg/MinistryVision?lang=en#Ministry%20Vision.

[18] MPEDIC (2024), Vision and Mission, https://mped.gov.eg/MinistryVision?lang=en#Ministry%20Vision.

[15] NIGSD (2020), The Vision.

[4] OECD (2024), OECD Economic Surveys: Egypt 2024, OECD Publishing, Paris, https://doi.org/10.1787/af900de2-en.

[20] OECD (2024), OECD Public Governance Reviews: Egypt: Strengthening the Foundations for More Efficient and Effective Public Governance Reforms, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/d5a42670-en.

[8] OECD (2023), Government at a Glance 2023, OECD Publishing, Paris, https://doi.org/10.1787/3d5c5d31-en.

[12] OECD (2020), OECD Investment Policy Reviews: Egypt 2020, https://doi.org/10.1787/9f9c589a-en.

[5] OECD (Forthcoming), Modernising the public administration to deliver better services and achieve Egypt’s vision 2030 and long-term goals.

[17] OECD (Forthcoming), Towards a more effective implementation of the Egypt Sustainable Development Strategy Vision 2030.

[2] Sachs, J.D., Lafortune, G., Fuller, G., Drumm, E. (2023), Sustainable Development Report, https://dashboards.sdgindex.org/rankings.

[1] State Information Service (2021), CAPMAS :Poverty rates in Egypt decline to 29.7% within year, State Information Service based on CAPMAS study, https://www.sis.gov.eg/Story/159611/CAPMAS-Poverty-rates-in-Egypt-decline-to-29.7%25-within-year?lang=en-us.

[13] UNCTAD (2023), World Investment Report 2023: Investing in Sustainable Energy for All, https://unctad.org/system/files/official-document/wir2023_en.pdf.

[3] United Nations Population Fund (2023), World Population Dashboard - Egypt, https://www.unfpa.org/data/world-population/EG.

[6] World Bank (2021), Worldwide Governance Indicators, Governance Effectiveness, 2021, https://info.worldbank.org/governance/wgi/Home/Reports.

[7] World Bank (2016), Public employment and governance in MENA: Middle East and North Africa, https://documents1.worldbank.org/curated/en/339381472236811833/pdf/Public-employment-and-governance-in-Middle-East-and-North-Africa.pdf.

[11] World Economic Forum (2020), The Global Competitiveness Report, https://www.weforum.org/reports/the-global-competitiveness-report-2020/in-full/infographics-14b60f7c60.