Egypt has identified a wide range of government assets that it will offer to private investors, as part of a government plan to fully withdraw from certain sectors of the economy, as it seeks to attract $40 billion in investments over the next four years.
The Egyptian Prime Minister, Mostafa Madbouly, announced that the government will, in the coming days, launch a “state ownership document”, showing the economic sectors which the state will stop investing in or in which participation rates will be either reduced or continued.
Egypt faces a growing budget deficit, an increase in borrowing costs, and a depreciating currency, all exacerbated by a rising wheat import bill and declining tourism revenues in the wake of the Russian invasion of Ukraine.
According to Madbouly, the plan includes 21 measures to activate the stock exchange and double the market cap, as 10 companies will be launched before the end of the year, including two in the defense sector. It will be “merging 7 ports into one company, and 7 hotels into one as well, and will offer these shares in the stock exchange.”
Last month, Egyptian President Abdel Fattah al-Sisi ordered the government to draw up a program to attract $10 billion in “special participation” over the next four years.
Madbouly said the government has already identified $9 billion in assets that will be converted into cash, and another $15 billion are in the works.
Sovereign sukuk will be issued
He revealed that sovereign sukuk will be issued with the release of bonds in Asian countries, as it happened with the samurai bonds. He said, “85 percent of the domestic product is public debt, and we aim to reduce it to 75 percent in 2026 with an extension in debt maturities, aiming at that time for an initial surplus of 2 percent, with a clear plan to reduce debt. External debt is not stressful because 91 percent of it is long-term.”
Egypt aims at maximizing its exports in 9 basic industries and identified imports at about $20 billion annually.
He pointed out that Egypt is open and working to increase foreign direct investment, stressing that the Prime Minister’s Unit for Solving Investors’ Problems will work to remove all obstacles.
Regarding the recent central bank measures, Madbouly said that “all we aim is for the measures that are taken temporarily to solve a crisis, noting that the period during which hot money came out was a priority for foreign direct investment to enter the Egyptian market.” He added that investors have the right to exit at any time they wish.
“We were able to secure the exit of hot money and we were not under any pressure,” noting that no one can be sure of the timing of when the crisis ends