Saudi Press

Saudi Arabia and the world
Friday, Jul 04, 2025

al-monitor

How megaprojects mitigated COVID-19 impact on Egypt’s labor market

The coronavirus pandemic has increased the unemployment rate, but the impact could have been worse without the infrastructure overhaul.
The repercussions of the coronavirus pandemic has escalated Egypt’s unemployment rate to a two-year high, standing at 9.6% of the total workforce in the second quarter of 2020, up from 7.7% in the first quarter, the state-run Central Agency for Public Mobilization and Statistics (CAPMAS) said in a statement Aug. 17.

CAPMAS ascribed the increase to the anti-coronavirus measures taken by the authorities such as the shutdown of schools, the suspension of flights, partial closing of shops and the night curfew.

The labor force fell by 8% to 26.68 million in the second quarter, down from 29 million in the first quarter, according to CAPMAS.

“Thanks to the national megaprojects under construction, the employment rate did not increase more than 9.6%. The numerous infrastructure projects nationwide have cushioned the negative impact of the COVID-19 pandemic on Egypt’s economy, especially growth and employment,” Abdel Mottaleb Abdel Hamid, professor of economics at the Cairo-based Sadat Academy for Management Sciences, told Al-Monitor.

Currently, the Egyptian authorities are carrying out a number of national megaprojects to increase aggregate demand and create jobs. All economic sectors have been badly affected.

The retail and wholesale sector was hit the hardest as 624,000 jobs were wiped out, according to the same CAPMAS statement. However, the building and construction sector was the least impacted as roughly 288,000 jobs were cut.

“As we have seen, the pandemic has seriously impacted many countries, including the United States, the world’s largest economy. However, the repercussions have been less severe in Egypt, where the economic growth rate is in the positive level. Supplies of food commodities and consumer goods have been steady during the partial lockdown as production was on track,” Abdel Hamid noted.

On July 29, Minister of Finance Mohamed Maait said that the economy grew by 3.8% of the gross domestic product in fiscal year 2020, which ended on June 30.

“Private-sector investment plummeted significantly [between April and July] due to uncertainty and high risks. However, the government carried on its megaprojects — especially in the construction of roads and bridges — as planned,” Abdel Hamid said.

Prime Minister Mustafa Madbouly said June 29 that the state had carried out national projects worth 4.5 trillion Egyptian pound ($284 billion) over the past six years.

“President Abdel Fattah al-Sisi has embarked on a raft of megaprojects, which spearheaded growth over the past few years. The construction of roads, bridges, water waste and power stations directly employ thousands of people.

The government creates jobs for contracting workers. The state’s investment in infrastructure projects has been the pillar for growth during the partial lockdown,” Abdel Hamid said.

He added, “I think the unemployment rate will take a downtrend later this year as all economic activities get back to normal. Many businesses are still operating half capacity. The situation will improve dramatically when everything is in full capacity."

The authorities imposed a night-time curfew between March 25 and mid-June among other measures to combat the spread of the pandemic. On July 1, the government reopened airports for international flights.

“Prior to the pandemic, the jobless rate was around 7.7% in the first quarter of 2020; in 2013, it was 13.6%. An employment rate of 5% is universally seen as normal. There’s no such thing as a zero jobless rate,” Abdel Hamid noted.

Mostafa al-Fiky, financial planner at oil and energy company Saipem, agreed with Abdel Hamid that the national megaprojects have mitigated the impacts of the lockdown.

“Without the megaprojects, the impact would have been more rigorous. The second quarter of 2020 was exceptional as the lockdown caused a slowdown on all levels globally — not only in Egypt. The megaprojects have been essential for economic growth and employment. By nature, infrastructure projects are labor-intensive,” Fiky told Al-Monitor.

He pointed out that the government has constructed more than 7,000 kilometers (4,350 miles) of roads over the past few years.

He said, “The New Administrative Capital, New Alamein City, Galala City [near the Gulf of Suez] and New Mansoura City [in the Nile Delta] are the top megaprojects along with six tunnels linking the Nile Delta and the Sinai Peninsula through the Suez Canal.

These projects have been the key factor for growth. In the meantime, the government is working on infrastructure overhaul from electric and internet cables to a fourth metro line."

According to Fiky, the labor market is picking up as most businesses have resumed operations. “Moreover, tourism recovery will add more momentum to growth as the coronavirus concerns ease worldwide. I think the impact will be short-lived,” he added.

“I expect the jobless rate will decline back to around 7% by the end of the fourth quarter or early 2021, as the economy will be back on track. Growth will rise as of the third quarter. The International Monetary Fund is upbeat about Egypt’s economy, which is forecast to expand by 6.5% in 2021,” he concluded.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Emirates Airline Expands Market Share with New $20 Million Campaign
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
×