Cairo – The Egyptian government announced a plan to transfer the management of all government companies to the sovereign Egypt Fund, with the intention of maximizing the return on the state’s assets, amid bureaucratic and administrative challenges that may disrupt the achievement of goals.
A pivotal question arose: Does the transfer of all government companies to the sovereign fund represented a strategic step towards maximizing the assets of the state, or is it just an administrative recycling that will not make a fundamental change in light of the complex challenges facing mergers and management?
During his participation in the (Interest -2025) conference in Abu Dhabi, Egyptian Minister of Investment Hassan Al -Khatib stated that the transfer of state -owned companies to the Egypt Fund will be in stages, according to the plan.
The new plan is summarized in the fund in 3 steps:
- Restructuring of state -owned companies.
- Attracting private sector companies.
- Some companies offer public subscription (on the stock exchange).
This approach aims to maximize the value of the companies and the returns they achieve, rather than focusing on selling them at any cost.
Within the framework of adhering to the state’s royal policy document issued in 2022 and the economic reform program supported by the International Monetary Fund, the Egyptian government is seeking to offer stakes in 32 various companies, covering 18 different economic sectors, according to previous statements by Prime Minister Mustafa Madbouly.
According to government data, the capital of the sovereign Egypt Fund, which was established in 2018, is about 12.7 billion dollars, while the assets managed by about 637 million dollars, and 4 sub -boxes that work in various economic fields are branching.
It aims to manage the funds and assets of the state, its affiliated bodies and the owned companies or participate in it, in accordance with the statute and the best international standards to maximize their value for future generations, while cooperating with Arab and foreign funds and financial institutions to achieve this goal.
Earlier, Parliament approved controversial amendments to the “Egypt Sovereign Fund” law, which included:
- Exempt all internal transactions between the fund and its entities completely from government taxes and fees.
- Granting the Fund is legal protection that prevents any external entity (other than the contracting parties) from challenging the validity of its contracts or measures taken to achieve its goals.
These amendments are strengthened by the Fund’s powers in asset management, but they ask questions about the extent of the transparency of its operations and control controls.
Challenges and recommendations
“The performance of the fund did not achieve the desired goals, and he focused mainly on the transfer of ownership of assets between government agencies, instead of developing them and generating concrete returns,” said Mohamed Fouad, a member of the Consultative Committee for the Council of Ministers.
In an interview with Al -Jazeera Net, he adds that the ambiguity about the identity of the fund and its role, in addition to its institutional lack of stability due to the repeated administrative changes, is an obstacle to achieving its goals.
He added that although the fund is ranked 48th in the world among the 100 largest sovereign funds and owns sub -boxes in multiple fields, the results of transfer of assets, such as the transfer of ownership of 13 government agencies from central Cairo in January 2024, have not yet been translated into the desired transformations.
Fouad recommended a clear restructuring of the fund, including defining a balanced strategy that combines employment and partnership, achieve administrative stability and develop a mechanism based on accurate studies to transfer assets to achieve the maximum possible benefit.
Outside the sale of assets
For his part, the researcher in the political economy and the director of the International Center for Development Studies, Mustafa Youssef, describes the government’s plan to transfer all state companies to the sovereign fund as “bold”, saying: “The Egyptian government adopts controversial financial policies, by transferring the state’s assets to the sovereign Egypt Fund and this reflects a volatile economic reality.”
Youssef says in a comment to Al -Jazeera Net that the government’s repetitions about the proximity of resolving the dollar liquidity crisis through the sale or mortgage of assets, do not reflect reality and do not rise to the level of real plans.
The essence of the crisis, according to Youssef, lies in the military domination of the sectors of the economy and the competition of the private sector, which leads to a structural defect and a lack of comprehensive development plans.
The economic researcher suggested radical solutions to ensure a comprehensive and sustainable economic reform that includes:
- The rule of law.
- Raise the army’s hand from the economy.
- Reducing government spending.
- Selling non -feasible projects.
- Directing resources to vital sectors such as education, health and tourism.
