Sunday, Egyptian Prime Minister Mostafa Madbouly revealed a government plan to sell state-owned assets worth 40 billion dollars within four years, at 10 billion dollars annually, in an effort by the Sisi regime to provide financial resources to get out of the tremendous economic crisis the country is witnessing due to its policies erroneous.
This plan, if implemented, is the most significant privatization process in the modern history of Egypt, and its title is “Getting rid of public ownership as an idea”, and not just selling some projects or companies that are faltering or that need significant investments that are not available as was the case previously, which ends the distorted state capitalism as we knew in Egypt over the past few years.
According to the regime’s plan, it is scheduled to merge the seven largest Egyptian ports into one company and put them on the stock exchange, as well as the case with several state-owned hotels, in addition to offering ten government companies, including two companies affiliated with the army, and offering modern transportation projects, especially the monorail and express train projects, in the stock exchange.
The government is scheduled to announce soon the so-called State Ownership Policy, which will define entire economic sectors that the state intends to exit in favour of the private sector, in addition to other industries in which it wants to reduce its ownership and the third group of sectors in which it intends to continue. Madbouly revealed that the government has finished evaluating state-owned assets worth $9.1 billion, which it intends to offer to investors soon, as part of a plan to sell $40 billion in investments over the next four years, a plan that al-Sisi had announced for the first time last April.
According to the size of the declared assets intended to be sold, experts believe that the state will tend to offer companies in non-traditional sectors that go beyond the companies affiliated with the Ministry of Public Business Sector, which is the traditional field of privatization in its previous stages (since the beginning of the nineties), and among these unconventional sectors are electricity, water and gas companies.
The Egyptian regime seeks to solve the crisis of foreign reserves shortage and the aggravation of the external debt in any way. Therefore, experts believe that the government will move to conclude deals to sell assets with Arab sovereign wealth funds in a way that achieves its goal of obtaining its dues in exchange for selling assets in foreign currency the one hand, in addition to the ability to To negotiate with the management of these funds about the future of the economic sectors from which the state will exit on the other hand, by taking advantage of the political relations between Egypt and the Gulf states. The government’s approach is consistent with previous requests to the International Monetary Fund, which the government is currently seeking to obtain a new loan (in addition to other loans worth $20 billion) as the IMF demanded Egypt last July to specify specific economic sectors exclusively in which the state intends to continue and to exit from other sectors.
Egypt is going through a severe economic crisis, affected by the repercussions of the Corona pandemic from which the world has not yet recovered, the Russian invasion of Ukraine, global inflation, the high fiscal deficit in the budget, and the rise in foreign debt to an unprecedented level, reaching about 170 billion dollars, which is equivalent to 40% of the gross domestic product. And instead of the regime reviewing its economic policies and stopping the lavish spending on non-productive projects such as building two new capitals from which it rules, with a summer capital in between, it decides to extend its hand over the property of the people and future generations and sell them to whoever pays in dollars! This is something that, if done, will completely change the face of Egypt and the state’s relationship with its citizens.