What:
The Egyptian government has reshaped its asset privatization strategy, now prioritizing banks and financial institutions at the forefront of its state asset sale program.
According to a preliminary state budget document reviewed by Al Arabiya Business, the priority arrangement also includes companies operating in the energy, transportation, and telecommunications sectors with the aim of revitalizing the Egyptian stock market and increasing governance, transparency, and disclosure.
So What:
The state’s asset sale program is crucial for increasing non-tax revenues and reducing reliance on external debt. By emphasizing sectors like banking and utilities, the government aims to attract robust investments and enhance market liquidity. This move is also expected to bring about greater corporate governance and transparency in publicly listed companies.
Long-Term Goals:
Beyond revitalizing market sectors, the government plans to channel 50% of the proceeds from these privatizations towards paying down national debt, lightening the financial load on future budgets. As per the document, the program is part of a grander scheme to increase non-tax revenues to EGP 600 billion by the end of FY 2024/2025.
EGP 1 Trillion Cap:
The government aims to include investments from public sector companies and economic authorities in the public investment ceiling, targeting a cap of EGP 1 trillion.
Some Context:
This revised asset sale strategy is part of Egypt’s broader economic reform efforts aimed at optimizing the management of state-owned enterprises and attracting private investment to fuel economic growth and stability.
