The power-play between Nigeria and Egypt has embraced a new fashion in recent times. While the North African country has played catch-up in the past, it is quickly becoming Africa’s growth hub, ahead of Nigeria.
Amazingly, Nigeria and Egypt lead in several economic statistics in Africa. Economically, both countries have the two largest economies in the region, with $477 billion in GDP.
In terms of venture funding, Egypt led the total equity funding raised by start-ups in Africa from June 2022 to June 2023, toppling Nigeria. The North African country surpassed Nigeria – the continent’s largest economy – as entrepreneurs raised $540 from June 2022 to July 2023, the African Private Equity and Venture Capital Association (AVCA) said in a report.
Interestingly, the two countries recently signed a memorandum of understanding (MOU) signed by the central banks of Egypt and Nigeria to create a fintech bridge. The agreement between the two central banks is anticipated to include shared regulatory projects, coordinated licensing and legal frameworks, information and data exchange, cross-referrals for fintech, and talent development, however, the entire breadth of the collaboration has not yet been fully defined.
The action is specifically intended to increase financial inclusion, according to Aishah Ahmed, deputy governor for financial system stability at the Nigerian Central Bank.
Just Like Nigeria
Although Egypt’s economy has been able to stabilize, grow steadily, and increase foreign reserves, the nation still faces many of the same social and economic problems as Nigeria, including widespread poverty and unemployment, high inflation, a sizable public debt, and reliance on remittances and aid.
Source: TechEconomy
In recent years, the Egyptian economy has experienced rapid expansion. However, considering that the majority of the country’s current economic boom may be attributed to outside sources, the issue of growth sustainability is a severe worry; just like in Nigeria.
Very little has changed in Egypt’s campaign against corruption, much like it has in Nigeria. The nation of North Africa has similarly struggled to foster a supportive business environment. Egypt’s ease of doing business in 2020 placed it 114th out of 190 nations, according to Statista. The nation’s ranking fell from the 108th spot, which was the highest during the period under review.
Source: TechEconomy
One of the clearest signs that Egypt is starting to reap economic benefits is the small improvements that have been driven by economic reforms. Unlike Nigeria, Egypt has enjoyed a better GDP growth rate in the last decade. In the same period, Nigeria has gone below the horizontal line twice.
A Northern Example
Egypt’s long history of reform, which spans several generations, has played a significant role in aiding the country in resolving its urgent socioeconomic problems and raising the standard of living for its citizens. Without a doubt, Egypt has begun a significant but slow growth process. Sectoral policies have also been put into place to address socioeconomic challenges like the informal economy, SMEs, and various economic sectors.
The improvement in subsurface asset prices, the rise in Gulf oil revenue that led to increased investment in the nation, and the increase in remittances from abroad have all contributed to Egypt’s current economic performance. These external variables are key drivers of recent growth.
The results of the reform appear to have been inconsistent, according to the evidence. Egypt has succeeded in maintaining economic stability, advancing steadily, and increasing its foreign exchange reserves.
By 2050, Nigeria is projected to have the third-largest population in the world. The decisions made in 2023 will go a long way in shaping its future. Whatever the case, Egypt’s recent growth points to why Nigeria needs better leadership decisions.
