Controversy in Egypt over the “Asset Liquidation” Committee, and Concerns Extend to the Suez Canal | Economy

Cairo- The document of the new Egyptian government’s work program – during the next three fiscal years – revealed the formation of the so-called “asset liquidation committee” with the aim of achieving financial returns for the public treasury by selling state-owned assets.

This new committee appears to be completely different from the “government offerings” programme, in which the government pledged to offer shares in 32 (government) companies for sale, and the sales operations include 18 economic sectors and activities.

The decision to form the “Asset Liquidation” Committee comes as part of a set of economic measures aimed at strengthening financial resources, but it raises many questions and concerns about the future of these assets and the consequences of selling them on the economy and society.

The Egyptian government’s work program document, which was circulated by local websites, extends from 2024-2025 to 2026-2027, and its objectives include:

• Establishing an “Asset Liquidation” Committee with the aim of achieving EGP 20-25 billion annually for the treasury from the proceeds of the exit over the coming years.
• Transferring 1% of GDP from exit revenues to the budget to reduce the debt of budget agencies.

This step coincides with the state’s efforts to move from Cairo’s old and crowded neighborhoods to the new administrative capital, and to try to exploit vital and old assets, which adds another dimension to the discussion of targeted assets, including strategic assets such as the Suez Canal.

But the Egyptian government denied, last Saturday, an audio clip talking about its intention to sell the Suez Canal for a trillion dollars, following the announcement of the formation of the committee, describing it as “fabricated.”

She said in an official statement that the Suez Canal will remain fully owned by the state and subject to its sovereignty, whether in its management, operation or maintenance.

The decision also raised many questions and widespread reactions in light of the large financial inflows that Egypt has recently received, including:

• $60 billion in cash flows after Hikma deal and international financing.
• Investment agreements worth 70 billion euros with the European Union early this month.

This decision also raised the question: “Is selling assets the best solution to revive the Egyptian economy or does it pose risks to the country’s future?”

What is the difference between an offering program and a “liquidation committee”?

Economist and former official at the Ministry of Industry and Trade, Abdul Nabi Abdul Muttalib, believes that the decision to form a committee to liquidate state assets is linked to the government’s previous decision to establish a central unit to inventory, monitor and regulate state-owned companies and their assets, and to identify their various situations with the aim of increasing state resources and supporting the private sector, and has nothing to do with the government’s offering program.

Speaking to Al Jazeera Net, he criticised the term “liquidation of state assets” because the decision did not specify the type of assets, and therefore the thinking could extend to any asset such as sea and air ports, all agricultural and industrial projects, or even the Suez Canal and others. Hence, the decision should have been clearer in order to remove any ambiguity.

Abdul Muttalib expressed his belief that the matter would be different from the offerings program and that it would be linked to the disposal of government headquarters in the capital, Cairo, which the state owns and vacated as part of its plans to move to the new administrative capital, the revenues of which will go to the state treasury and will be affiliated with the Ministry of Finance.

He stressed that Egypt is moving forward with the offerings program because it is bound by international commitments with the International Monetary Fund within the framework of the program to increase the Fund’s new loan to $8 billion to achieve economic stability and correct policy errors.

The economic expert described the repercussions of selling and liquidating state assets and properties in exchange for one-time financial returns as a waste of the rights of future generations to own assets that guarantee them a degree of control and independence (expecting) social repercussions in light of the high poverty rate and low incomes and pensions for citizens.

Abdul Nabi Abdul Muttalib: Liquidating state assets and properties in exchange for one-time financial returns is a waste of the rights of future generations

Has the state abandoned its responsibility towards the citizen?

Political economy researcher Wael Gamal confirms that there are fundamental problems in the government’s economic programs that it announces, whether in agreement with the International Monetary Fund or otherwise, “represented by the lack of transparency and the lack of clarity in the mechanisms for implementing these programs, which raises citizens’ concerns and causes a loss of confidence in the effectiveness of these government programs.” He added, “I do not believe that they are national programs.”

He added – in his interview with Al Jazeera Net – that there are other dimensions related to the proceeds from the sale of assets owned by Egyptians, and he asked: Does this decision reflect the state’s urgent need for cash liquidity despite the large financial inflows it has recently received? Then he answered: Yes, the funding gap is huge, and the financial inflows do not arrive overnight, but rather in batches.

Gamal, who is the head of the Economic and Social Rights Unit at the Egyptian Initiative for Personal Rights, also raised many other questions:

• What assets are targeted for liquidation?
• Is it used to finance new development projects or is it directed to cover the budget deficit?
• Is there transparency in how these proceeds are used?

He replied, saying: Of course, part of it goes to paying off debt installments and interest and increasing the size of the cash reserve, but we do not know more.

Regarding the economic and social dimensions of the offering program or liquidation of assets from citizens, Jamal believes that this means the state abandoning its responsibilities towards the services provided to citizens at reasonable prices on the one hand, and selling valuable assets and companies to the state in exchange for one-time revenues instead of benefiting from the annual profits of those assets, whether they are companies, factories, banks or real estate.