Prime Minister Moustafa Madbouly outlined the government’s plans to privatize state-owned assets and increase the private sector’s role in the economy yesterday in a wide-ranging address that underlined the economic damage being done to Egypt by Russia’s war in Ukraine.
The prime minister used the two-hour news conference (watch, runtime: 2:07:15) to announce a raft of new measures and ambitious targets designed restructure the economy in favor of the private sector.
The PM also looked to reassure the public on the government’s handling of the crisis caused by the war, which he said was costing the economy hundreds of bns of EGP.
THE BIG SELL-DOWN
The government plans to attract USD 40 bn in fresh investments over the next four years by selling stakes in state-owned assets to local and international investors, Madbouly said.
It is aiming to raise USD 10 bn each year by offering a range of assets to the private sector. The USD 40 bn figure was first made public by President Abdel Fattah El Sisi in a speech late last month.
Prime Minister Mostafa Madbouly announced the government’s intention to offer 10 state-affiliated companies — including two companies affiliated with the Armed Forces — and to merge the seven largest Egyptian ports into one company and list them on the Egyptian Stock Exchange (EGX).
Up for sale, according to Madbouly:
- New and renewable energy projects
- Real estate assets in new cities
- Desalination projects
- Banking, telecom and education assets
- At a later stage: Possibly transport infrastructure such as the under-construction high-speed electric rail line and the monorail.
The government has already selected assets that, if sold, would contribute USD 9.1 bn toward this year’s target of USD 10 bn and is currently working on appraising assets worth another USD 15 bn as part of a “fast-tracked” component of the strategy, which should be completed this year, Madbouly said.
The remaining assets will also soon be identified and a timeline drawn up, he added.
The state wants to double the private sector’s role in the economy: The government wants to increase the private sector’s contribution to economic investment to 65% over the next three years, up from 30% last year, the PM said.
“Last year, Egypt achieved the highest rate of exports in its history and an unprecedented increase in the Suez Canal’s revenues,” Madbouly said, explaining that the value of Egyptian exports increased, and that the tourism movement was restored by $5.8bn in the first half (1H) of the last FY.
The PM also pointed out that the government is studying the establishment of a national intellectual property authority and the system of usufruct of industrial lands will be transformed without restrictions, adding that pricing will be based on the value of the facilities and will be paid in instalments.
Furthermore, according to Madbouly, Egypt is one of the candidate countries to be a major hub for green hydrogen and ammonia production, explaining that a new law will be issued to exempt industrial projects in new and border cities from taxes.
