RFI_New Macro_May _10_2023_Signed.pdf

Request for Information (RFI) # 72026323RFI00001

Issuance Date: May 10, 2023 Response Date: June 12, 2023

The United States Agency for International Development in Egypt (USAID/Egypt) is in the process of designing a new five-year, $14-16 million activity for New Macro. The activity aims at addressing macroeconomic issues in Egypt, building more resilience in Egypt's macroeconomic framework, and could include areas such as public finance, debt management, climate change financing, monetary policy, or attracting foreign investment. Climate change is an evolving priority for the Government of Egypt and USAID, and therefore the activity will consider it as a cross-cutting theme during implementation.

This is a Request for Information (RFI), providing public information to parties interested in USAID’s support in Egypt, and seeks to collect any information and suggestions about USAID’s planned programming. Information collected is intended to contribute ton the Mission’s activity design and development for an intended future Request for Proposal (RFP)/Request for Application (RFA).

Requested Action: At this time, USAID/Egypt is only seeking any feedback on the attached. Please note that USAID/Egypt is not seeking technical or cost proposals/technical or cost applications at this time. Responses to this notice are not offers and cannot be accepted by the Government to form binding contract or assistance agreement. Responses to this RFI are voluntary and USAID/Egypt will not pay respondents for any information provided in response to this RFI. If a future RFP/RFA is issued, it will be announced on www.SAM.gov or www.grants.gov at a later date.

While we welcome any comments you may have, we ask that, if you chose to respond, that you address the issues/questions in the attached document.

Instructions for Submitting Responses/Comments: Please send all responses to this RFI via email to Nehal ElKhatib, Administrative Contracting/Agreement Officer and Sr. Acquisition and Assistance Specialist (nelkhatib@usaid.gov) with a copy to Noha Habashi, Acquisition and Assistance Specialist (nhabashi@usaid.gov) by the date indicated above with the title “72026323RFI00001”. Responses must include the organization’s name, address, and point of contact, phone number and e-mail address. You will receive a confirmation acknowledging receipt of your response but will not receive individualized feedback on any suggestions.

Thank you for your assistance and interest in USAID/Egypt programs.

Sincerely, Martin Fischer Contracting Officer E-mail: mfischer@usaid.gov

Martin Fischer Digitally signed by Martin Fischer Date: 2023.05.10 14:29:23 +03'00'

Questions:

1. What areas should Egypt prioritize to support resilience to macroeconomic/fiscal shocks and avoid another depreciation of the local currency in 4 or 5 years from now?

2. How should international donors/cooperation partners support this resilience building process?

3. What can be done to encourage more long-term investment, both foreign and domestic, into

Egypt’s economy and diversify the country’s funding sources?

4. How does climate most impact Egypt’s economic future, and how should Egypt prepare for these challenges? Where and how should Egypt integrate climate change into its public investment decisions?

5. What are the prospects and best opportunities, if any, for engaging the private sector to support macroeconomic resilience on the part of the Government of Egypt?

6. What opportunities for coordination mechanisms exist among different GOE agencies and the private sector to support an effective policy making process?

7. Are there any ICT adoption examples and/or public data gaps that, if addressed, would enhance macroeconomic resilience/outlook?

Problem Statement:

COVID-19 and Russia’s ongoing war in Ukraine revealed Egypt’s continued vulnerability to external economic shocks. As Egypt is a “price taker” for many of the items it buys and sells, it therefore needs a better, more resilient, framework for dealing with external shocks when they come in the future.

Egypt is estimated to have less macroeconomic resilience than many other economies in the region: https://pdf.usaid.gov/pdf_docs/PA00X6F2.pdf. One USAID program estimates Egypt's Macroeconomic Resilience with a score of 45.83%, less than the average of 59.03% for the Middle East and North Africa region.

In a bid for smoothing economic cycles of boom and bust, Egypt must increase its resilience to these external shocks. The International Monetary Fund defines macroeconomic resilience as: the ability of countries to withstand shocks (instantaneous resilience) and recover quickly towards potential growth (dynamic resilience). The more that existential threats, including climate change, are integrated into Egypt’s macroeconomic framework, the more resilient Egypt’s economy will be.

Overall goal:

The goal of this new activity is to build more resilience in Egypt's macroeconomic framework, and could include areas such as public finance, debt management, climate change financing, monetary policy, or attracting foreign investment. Climate change is an evolving priority for the

Government of Egypt and USAID, and therefore the activity will consider it as a cross-cutting theme during implementation.

Modalities:

Illustrative interventions include helping Egypt institutionalize appropriate tools, policies, and/or mechanisms to address external and internal imbalances and thereby improve the country’s resilience to external shocks. The activity will prioritize policies that have direct or indirect connections with climate change issues and have large, positive impacts on attracting private sector investment and increasing the efficiency of public sector investment.

USAID is thinking about the areas of implementation as either internal sector or external sector.

Internal sector issues would be within the control of the GOE and USAID has typically focused our technical assistance here: capacity building and restructuring of the Ministries of Finance and Planning, connecting decision making on revenue and public investments, building models and systems to enhance policymakers’ ability to make decisions. Many external sector challenges are not in the direct control of the GOE: global oil and wheat prices and availability on the international markets, disruptions to international tourism, US interest rates, etc. While these are not under the control of Egypt, they can be anticipated and mitigated. Innovative solutions to building resilience to these external sector issues will be critical.

Above are virtuous cycles in the macroeconomic framework that USAID would like to support through the new activity in both internal and external sectors. The approach of the new activity would be to build on the successes of USAID/Egypts Macroeconomic Stabilization and Reform Project (MESR) in the internal sector and expand into areas that can reduce Balance of Payment pressures. The new activity would be expected to seek and propose activities where USAID can kick-start and support these cycles.

The new activity should be open to working with many potential actors so that the activity can be opportunistic on the areas where progress is happening and leave openings for new opportunities that present themselves.

There are many stakeholders in this space. Many are in the Government of Egypt or bilateral and multilateral donors such as the World Bank and International Monetary Fund. USAID expects that this activity will work directly with the GOE as a partner in these efforts and will coordinate very closely with WB and IMF counterparts, in addition to other donors, and local private sector actors.