Egypt Watch

Egypt issues 1 billion dollars in sovereign financial securities

The Egyptian government has announced that it is preparing to issue sovereign financial certificates worth one billion dollars in July to face the repercussions of economic crises and provide hard currency. This came in statements by the Egyptian Deputy Finance Minister, Ahmed Kajouk, during which he explained that Egypt’s external financing needs in the 2022/2023 fiscal year range from 6 to 7 billion dollars. Kajouk added that the ministry aims to issue green bonds and development bonds with more than $500 million each during the next fiscal year.

Egypt issued the Sovereign Financial Certificates Law last year, and the executive regulations have been completed. Also submitted the law to the Legislation Department of the State Council for study in light of the provisions of the constitution and related laws. On Egypt’s negotiations with the International Monetary Fund, Kajouk expected that the next few weeks would witness progress, especially after the government announced its plan to reduce debt and expand the private sector’s participation in development.

Last week, Egyptian Prime Minister Mostafa Madbouly said that the government has finished evaluating state-owned assets equivalent to $9.1 billion that it intends to put on the stock exchange. During a press conference, Madbouly announced several government steps to privatize state assets, most notably merging the seven largest ports in the country into one company, putting them on the stock exchange, and merging several state-owned hotels. He added that his government is now valuing new assets worth up to $15 billion. He made it clear that all of this comes in the context of a new phase of privatization, the features of which will become apparent in a plan, which he said will be announced soon.

Assistant professor at the American University School of Business Administration, Hani Genena, believes that the government will sell the assets to Arab sovereign wealth funds. He adds that the privatization policy pursued by the government aims to privatize sectors that have not been privatized before. Last July, the International Monetary Fund had called on the Egyptian government to identify specific economic sectors in which the country intends to continue.