May Nagy - Assistant Lecturer at The British University in Egypt ERF and World Bank Youth Essay Competition Award Ceremony Cairo, Egypt, January 17, 2017 www.erf.org.eg

1. Exploring the Bottom-of-the-Pyramid Proposition in Egypt
Can the Private Sector be the Solution to Youth
Unemployment and Poverty?
May Nagy
Assistant Lecturer at The British University in Egypt, Egypt.
PhD student at London Southbank University, UK.

5. Target 12%
Actual 26%
No progress in employability since 2011
46% of those employed are working in the informal sector
Who can solve this?

6. Government NGOs Private Sector
Who can solve this?

7. Private Sector
Who can solve this?
This paper will present a proposition that encourages the private sector to advance
development, at profit.
RESEARCH PURPOSE

8. THE BOTTOM-OF-THE-PYRAMID (BOP) PROPOSITION
Enormous aggregate purchasing power, predicted at
($429 billion in Africa alone), mostly consumed at the
exploitive, fragmented, informal economy. When multi-
national corporations (MNCs) convert this purchasing
power to the private, organised economy it will lead to
an increase in the income of BOP consumers, reducing
levels of poverty.

9. THE BOTTOM-OF-THE-PYRAMID (BOP) PROPOSITION
Employment
opportunities
and
reduced
poverty rates
Consumers
Producers
Entrepreneurs
Potential Employees
Private sector

10. BOP market is huge (17.5 million), young (25%), seeking
employment and predicted to grow at a rate faster than any other
segment of the Egyptian market.
Will it work?
1

11. 2
Will it work?

12. Forecasts of Growth Indices of Fastest Growing Consumer Spending
Categories: 2015-2030 (Euromonitor International from national
statistics/UN/OECD)

13. Euromonitor forecasts for 2015-2030:
- capacity of discretionary spending is expected to increase
- growth is expected in household income and total consumer expenditure
- young consumers will be driving growth
Egypt is an emerging, growing market, and only corporate market shares established now
will grow with it.
2
Will it work?

14. BOP consumers are quite spenders, who demand a variety of products across a variety of
categories.
Currently, their purchase power is almost exclusively directed toward the inefficient,
informal sector (also from BOP market)
3
Will it work?

15. egypt602 - table - 22/08/2016 12:46:36 Total SEC A B C1 C2 D E
Percentage of purchases % % % % % %
Salty snacks 131948 1 8 14 21 29 27
Pasta 108601 1 10 15 25 25 24
Detergents (HS/LS) 106816 1 7 14 24 27 27
Tea 106392 2 9 14 24 25 26
CSD 92650 2 13 15 25 24 21
Skin Cleansers 86545 1 9 14 24 25 26
Cooking Oil 81221 2 9 14 24 26 26
White cheese 79866 2 10 15 24 25 23
Dishwashing Liquid 74135 1 8 14 25 26 26
Biscuits 68032 1 10 15 24 26 24
Loose Milk 63192 0 9 14 27 26 23
Yoghurt (spoonable) 58195 2 14 15 24 24 20
Juice (RTD) 50670 3 13 16 24 24 21
Bleach 39265 2 9 14 24 27 25
Ghee 36374 1 9 13 23 27 26
Bouillion 35655 2 10 13 25 26 24
UHT Milk 30056 7 23 19 22 16 12
Canned Tuna 25356 3 13 16 24 24 21
Instant Coffee 24420 3 16 14 27 23 17
Hair care: Gels cream oil 20524 2 10 13 24 27 24
Shampoo 20258 3 13 15 25 24 19
Processed Cheese 19520 5 19 16 25 20 16
Chocolate confectionery 18648 5 19 16 24 21 15
Feminine Protection 13713 4 15 15 24 23 19
Jams 12639 6 17 15 24 21 16

16. BOP consumers are quite spenders, who demand a variety of products across a variety of
categories.
Currently, their purchase power is almost exclusively directed toward the inefficient,
informal sector (also from BOP market)
3 We want such merchants to become part of the formal economy by
engaging efforts with MNCs:
- Will allow MNCs to, cheaply, outsource some of its to young
entrepreneurs
- Will act as a source of stable business income for young BOP
entrepreneurs
Will it work?

17. List
of
Recommendations
Policies need to focus on promoting Egypt to foreign investors, specifically to MNCs looking to
expand.
Investment in infrastructure: With most of Egypt’s BOP reside in poor rural areas, they could be
included into the formal economy if they became accessible.
Policies need to change how they address the informal economy: Build a bridging platform rather
than trying to directly engage with the informal sector.
Policies need to be introduced that encourage MNCs to outsource their activities to local
entrepreneurs: Promotion of young local entrepreneurs to new business entrants or through tax
reductions.
Policies need to eliminate hurdles facing young BOP entrepreneurs, whether working on their own
or with MNCs.
Policies need to support SMEs and micro-businesses. Financial support is important, but non-
financial support is also essential, such as training, empowerment and follow-up.

18. Thank you…