Project Report: Private Sector and Agriculture Development in Egypt

This implementation completion report from the World Bank reviews the results of a substantial private sector agricultural development project in Egypt. The development objectives were to:

  1. promote rural economic development, leading to increased income and employment in rural Egypt;
  2. strengthen financial and institutional viability of PBDAC (Principal Bank for Development and Agricultural Credit)

The main strategies were to be improving financial intermediation in rural areas, improving the availability of term investment funds and transforming PBDAC into a financially viable intermediary.

What is interesting about the report is its story of total failure. Project records suggest that the project was prematurely rushed through to allow Egypt to benefit from IDA resources and it is clear that the project was not ready for implementation when it was approved. In addition the Government and PBDAC commitment to the project was inadequate. The Government continued to consider PBDAC as a tool to support economic development in rural areas rather than see it as a viable, market-based financial intermediary. Thus PBDAC was obliged to reschedule loans to farmers when the country faced adverse external conditions and reduced growth. For its part, PBDAC was far more focused on the implementation of the credit component than with the institutional development component.

The report concludes with a number of lessons learned which should make interesting reading for any donor organisation.

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