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Egypt to offer state assets to investors in $40bn privatisation drive

Image for illustrative purposes only. Source: Creative Commons

Egypt’s government has identified activities it will withdraw from or reduce its presence in over the next three years as part of a plan to expand the private sector, according to a draft document circulated in local media.

Egypt’s economy has been jolted by the impact of the war in Ukraine, and it is in talks over a new loan programme with the International Monetary Fund.

The government says it aims to offer assets to private investors to attract $40 billion over the next four years, and to boost private investment.

Previous privatisation plans have been repeatedly postponed, partly due to market turbulence and legal and bureaucratic hurdles.

According to the document, areas the government intends to exit within three years include the grains sector with the exception of wheat, port construction, manufacture of fertilizers, and water desalination plants.

Areas where it may reduce its presence include power generation, pre-school education, textile manufacturing, the management, maintenance and operation of metro lines, and mining and quarrying.

Areas where the state may increase its presence include the construction of railways and metro lines, operation of the Suez Canal and financial brokerage and insurance activities. The government may enlist the private sector to participate.

Some economic sectors appear in more than one category.

The document said the government planned to reduce its holdings in the textile industry by 90 percent, the mining industry by 40 percent, the chemical industry by 75 percent, and the food processing industry by 73 percent.

Central Bank Governor Tarek Amer said no agreement had been reached about the size of the IMF deal.

“It will not be a big amount as Egypt has so far taken a big allocation,” Amer told reporters on Wednesday. “We tap the IMF to benefit in terms of structural reforms.”