The Arabist

The Arabist

By Issandr El Amrani and friends.

Maximum Effectiveness at Egypt’s Social Fund?

It is the Near East foundation telling us that everything is fine at Egypt’s Social Fund for Development. The fund is the government’s agency for implementing development projects and financing SME’s.
How are they doing? Near East Foundation's Center for Development Services was selected--after competitive bidding--to find out.

NEF zeroed in on 39 projects in 18 communities in both Lower and Upper Egypt to investigate just how results jibed with original objectives, getting very specific: to what extent has poverty been reduced and people been empowered, and if so, how. They studied seven areas--potable water, sanitation, roads, environment, micro-credit, education, and health--at the household and community levels.

I haven’t read the full report, but it appears to give good grades to the Social Fund’s work.

Single projects of the Social Fund might very well improve the situation of ordinary Egyptians, but overall, I always doubted the Social Fund was an effective institution, and this assessment seems to fall short of addressing broader issues.

For instance, given the enormous funds the fund has at its disposal, rumours on corruption persist. Back in 2002, an insider told me that corruption was common, although recently an international donor working with the fund also told me that he was satisfied with its effectiveness and management.
However, every time I’m on my way to the airport, I see the fund’s new show-room growing and growing, at a site between GAFI and Cairo International Fair, wondering how much money goes into the massive building that will serve to display the fund’s projects.

I also think that the micro-lending activities of the Social Fund are crowding out the private sector, at least to a certain extent. The limited availability of lending offers to poor households as well as SMEs is a chronic ill of Egypt’s banking sector, reducing economic growth.

Interesting to see how one development agency applauds another.