Egyptian Cabinet Reveals Private Sector Expansion Plans
**The Egyptian Cabinet has unveiled its strategy for enhancing the role of the private sector in the economy, announcing plans to offer shares in military-owned enterprises to the International Monetary Fund (IMF). This initiative is aimed at meeting specific criteria set by the IMF for expanding private sector participation.**
As part of this plan, the sovereign wealth fund is preparing to divest its interests in several key enterprises, including Wataniya Petroleum, a fuel station operator; Chillout, a mineral water manufacturer; Silo Foods; and the National Road Construction Company. These sales are expected to take place over the next two years; however, the Cabinet has not disclosed the exact proportion of shares that will be sold following the restructuring of these companies.
The Cabinet has also appointed EFG Hermes Holdings and CI Capital to facilitate the promotion and underwriting of the share offerings. This marks a significant step in the government’s long-term vision to energize the economy through increased private investment.
Concerns regarding competition have been a prevalent issue, particularly since President Abdel Fattah el-Sisi took office in 2014 after leading a military coup against former President Mohammed Morsi. The notable expansion of military-owned businesses during this time has raised alarms among local firms and foreign investors regarding possible unfair competition.
Despite these concerns, the government contends that military-affiliated companies fulfill essential market demands and maintain a level playing field for all enterprises. The IMF has firmly positioned the enhancement of private sector involvement as a precondition for approving an extended credit facility worth $8 billion.
During a recent press conference, Prime Minister Mustafa Madbouli highlighted that the wealth fund also intends to invite bids for the development of historical government buildings in downtown Cairo starting in July. This initiative is envisioned in collaboration with the government to revitalize the area.
The upcoming endeavor follows the government’s relocation of ministries to a newly established administrative capital situated east of Cairo last year. The historical center of Cairo, which was modeled after Paris in the 1860s, boasts an array of majestic, albeit deteriorating, structures—many of which were nationalized and fell into neglect during the 1950s and 1960s.
Madbouli further remarked on the current global economic landscape, citing that customs tariffs imposed by the United States have triggered what he termed a ‘complete global economic and trade war.’ This underlines the challenges the Egyptian economy faces in the current international climate.
Originally established in 2018, the sovereign wealth fund is tasked with fostering private sector partnerships and enticing foreign investments into state-owned entities. Historically, both the government and military have been reluctant to cede control over certain assets, making this recent movement a significant pivot towards economic reform.
