Clegg set to give £5m to Egypt’s economy

A £5M package to boost the Egyptian economy is to be announced by Deputy Prime Minister Nick Clegg today during a visit to Cairo.

The British money is intended to help to create jobs in the country as it tries to make the transition to democracy in the wake of the Arab Spring uprisings.

It will go to the European Bank for Reconstruction and Development and help to improve access to credit for small and medium-sized businesses.

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Another £500,000 or more of UK cash is to be pledged to support balanced media coverage, women candidates and international presence during elections.

There will also be help for Egyptian higher education, to promote political engagement, and for apprenticeships in the country.

But Mr Clegg, MP for Sheffield Hallam, will also call for a clear timetable for the country’s transition to democracy, the lifting of the emergency law and guarantees on human rights, while pledging support from the UK.

Almost 900 British firms are involved in the Egyptian economy and provided more than 70 per cent of the country’s foreign investment in 2010.

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The funding comes amid warnings from MPs that British aid money may increasingly be lost to fraud and corruption because of changes to how it is targeted.

The Department for International Development (DfID), whose budget is rising, is refocusing overseas aid on countries seen as fragile and in conflict, such as Somalia, Burma and Pakistan.

But the cross-party Public Accounts Committee (PAC) cautioned that “operating in high-risk environments means the potential for increased risk of leakage through fraud and corruption”.

It said that increasing spending via multilateral organisations – such as the European Commission – may mean more British money is lost to corruption.

Save the Children said donors should not be deterred from providing aid to the most troubled countries. Director of advocacy and policy Brendan Cox said: “Risk should be managed, not avoided.”

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