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Egyptian Prime Minister Mostafa Madbouli has announced a series of planned privatizations of state-owned companies. These steps are being taken to address the economic crisis and inflation, which is growing at almost 15% in April, debilitating the country’s economy.
Egyptian Prime Minister Mostafa Madbouli has announced a series of planned privatizations of state-owned companies. These steps are being taken to address the economic crisis and inflation, which is growing at almost 15% in April, debilitating the country’s economy.
The strategy unveiled by the government includes the privatisation of ten public companies. Two of the companies to privatize belong to the army. It is also trying to create two listed companies, one of which will bring under its fold the seven main Egyptian ports and the other the country’s best hotels. The military has a large number of companies under its supervision. The army claimed in 2019 that it is supervising more than 2,300 projects employing five million civilians. Also, since 2017, non-oil private sector activity has remained contracted, an indication of the slowing down of the economy. The process of slowing down accentuated since April this year.
It may be noted that President Abdel Fattah al-Sissi had called on his government to establish a privatisation strategy with the aim of bringing ten billion euros per year over a period of four years into the state coffers
Madbouli stressed that the complete empowerment of the private sector by 2025 was part of Cairo’s strategy to deal with the economic crisis and called for private sector participation in total investments to be increased to 65. It is presently estimated at the 30% present level.
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There are opinions aired by many that the state is competing unfairly with the private sector. They feel that the state should have a regulatory role and should not enter into the production role. Recent war and galloping inflation forced Egypt to devalue its currency by 17%.
Saudi Arabia, a major ally of Abdel Fattah al-Sisi’s regime, deposited US$ 5 billion in the Egyptian Central Bank. Part of these funds would be redirected to direct investments. Cairo is also holding consultations with the IMF for contracting fresh loans to tie down its financial challenges.
Saudi Arabia, a major ally of Abdel Fattah al-Sissi’s regime, deposited US$ 5 billion in the Egyptian Central Bank. Part of these funds would be redirected to direct investments. Cairo is also holding consultations with the IMF for contracting fresh loans to tie down its financial challenges.
