Egypt lays out blueprint to attract private investment
cairo — Egypt plans to launch its first sovereign fund by the end of the year and will begin a roadshow in the first half of 2019 to drum up private investment, the country’s planning minister said.
Modelled after sovereign funds in India and Malaysia, Egypt’s new investment arm will seek to generate additional wealth from underutilized state assets rather than investing surplus oil and gas revenues as Gulf countries do. Partnering with the private sector, the fund will seek to attract domestic and foreign investment and build on economic reforms started in 2016 with the flotation of the currency.
“Egypt has a wealth of assets and companies that have not been properly used and mismanaged over many years, and we are ready to start a real partnership with the private sector to render them productive and more advanced,” Planning Minister Hala El Saeed said in an interview in Cairo.
The fund is the latest government measure aimed at reviving growth and investment that faltered in the wake of the 2011 uprising that ousted president Hosni Mubarak. The floating of the pound in 2016 and other measures such as reductions in fuel subsidies allowed Egypt to secure a $12 billion International Monetary Fund loan that has helped to restore some market confidence. Egypt also plans to raise up to 100 billion pounds ($5.7 billion) by selling minority stakes in
We are ready to start a real partnership with the private sector to render them productive and more advanced Hala El Saeed, Egyptian Planning Minister
at least 20 state-owned enterprises on the stock market.
The Egypt Fund will have an authorized capital of 200 billion Egyptian pounds ($11.2 billion), and will start with paid-in capital of 5 billion pounds, 20 per cent of which will be injected by the government when it is set up.
The Egypt Fund will partner with the private sector to invest in a wide range of assets, including land and buildings, as well as stakes in stateowned companies at market value, the minister said.
While the government will wholly own the Egypt Fund, the private sector will be allowed to buy stakes of over 50 per cent in sub-funds and affiliated companies. The fund will also be able to invest in various financial instruments, stocks, bonds and other securities inside and outside Egypt.
The vehicle will initially invest domestically in priority sectors such as tourism, manufacturing, petrochemicals, pharmaceuticals and agribusiness that offer the potential for quicker returns, but could later explore international opportunities, El Saeed pointed out.