Sukuk law in Egypt opens the door for privatisation

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Egypt’s parliament approved, on Monday, the bill of the sovereign sukuk proposed by the government. Sukuk are bonds offered by the government for creditors to finance the public services. Such bonds are guaranteed by the state assets. The new law sparked controversy as it opens the door for privatisation of public services and assets in favour of the creditors. “The public service would turn into a profit-centred project depriving the citizen of necessary services he cannot afford and wasting the rights of taxpayers,” said economic journalist Ali Saif who spoke to Egypt Watch.

Along with sukuk, the parliament approved two other controversial bills regarding the establishment of two funds. The first one is for charitable endowment and allows the minister of awqaf (endowments) to use the endowment in favour of governmental projects. This idea was previously refused by the Council of Senior Scholars, who explained that religious endowments must be used according to the initial condition put by the endower.

The second bill regards the fund of medical emergencies established to raise the finances of the medical sector in the face of emerging crises such as COVID-19. The fund will be financed through new tariffs imposed on citizens, which will overburden them.