Faced with serious socio-economic challenges since the start of the war in Ukraine, the Egyptian president has called for a partial privatization of military-owned companies before the end of the year, as part of efforts to deal with to the economic fallout from the war between Russia and Ukraine, the British daily reported on 27 April Financial Times (FT).
In a speech delivered on Tuesday, April 26, Abdel Fattah Al-Sissi “also announced plans for greater private sector participation in public enterprises”, indicates the FT.
The Egyptian government had previously indicated its intention “to sell minority stakes in 23 public companies” and to list companies belonging to the army on the stock market, but the project has since stalled.
However, the economic fallout resulting from the war in Ukraine seems to have given a boost to the plan, continues the FT, the conflict having forced the country to devalue its currency by 15% in March and to ask for help from the IMF.
Ten billion dollars every year
In addition to the jump in commodity prices, which forced the country – the world’s largest wheat importer – to allocate a larger amount to grain and oil imports, the conflict reduced the flow of tourists from Russia and Ukraine, two important markets for the sector, indicates the British newspaper.
At the same time, the country is experiencing an outflow of capital despite the high interest rates it offers, due to international and local uncertainties.
The partial privatization of public companies, including those owned by the army
– hitherto untouchable – should allow, according to Sissi, to garner “10 billion dollars every year for four years” and thereby remedy the sharp drop in income and the flight of capital.
strongest institution in the country, “the Egyptian army owns dozens of companies in several sectors of the economy”, a presence perceived as an obstacle to competition on the market and which thus curbs the appetite of private and foreign investors, considers the FT.