El Sisi to privatise and list companies run by military on Cairo stock market
Egypt’s plans to privatise companies owned and run by the military could put to rest persistent questions about their transparency, operating revenue and profits.
But experts and President Abdel Fattah El Sisi agree that it is likely to take years for them to be listed and traded on Cairo’s stock market.
Mr El Sisi announced the privatisation decision in televised comments on Thursday.
“These companies must be listed on the bourse and offer Egyptians a chance to own shares in them,” the president said.
He suggested that the process might take some time. His five years in office have witnessed staggering growth in the military’s economic activity, with significant forays into areas such as advertising, film production and imports.
Mr El Sisi, a former army chief, sought to reassure his nation of 100 million people that the military’s role in the economy was not intended to sideline or weaken the private sector, and renewed his call for businessmen to come forward and partner in projects with the military.
The president’s comments come after allegations of corruption against the military by a businessman living in self-imposed exile in Spain who posted a series of video messages online that went viral. Mr El Sisi denied the allegations in televised comments to the nation in September.
There has been a flurry of official assurances since then that the country is on track to achieve prosperity after years of political turmoil and violence that came after a 2011 popular uprising that toppled longtime ruler Hosni Mubarak. Criticism of government policies and serious probes into claims of corruption or mismanagement have also been encouraged.
“We are not perfect,” Mr El Sisi declared on Thursday, urging the staunchly pro-government parliament to thoroughly investigate corruption allegations and publicise their findings.
The Egyptian military’s economic activity can be traced back to the mid-1950s when factories were built to produce munitions and basic firearms. The industry began to diversify and expand under the late president Anwar Sadat who sought to make the military economically self-sufficient. The military built an economic empire during Mr Mubarak’s 29 years in office.
In 1997, Mr Mubarak placed the military in charge of all unused land in Egypt.
But the biggest and quickest expansion of the military’s economic activity came after Mr El Sisi took office in 2014, a year after he led its removal of an elected but divisive president, Mohammed Morsi of the banned Muslim Brotherhood.
Mr El Sisi said in December 2016 that the military accounted for up to 2 per cent of the country’s GDP, a figure widely thought to be too low. Egypt’s
GDP that year was $336 billion (Dh1.234 trillion), the World Bank said.
However, the military’s economic role was big enough to prompt a warning in 2017 from the International Monetary Fund, which said the development of the private sector and job creation “might be hindered by the involvement of entities under the Ministry of Defence”.
Mr El Sisi has said repeatedly that military-owned businesses provided hundreds of thousands of jobs.
Public listing of military companies might prove a lengthy and complex proposition, said Abdel-Qader Ramadan, head of economic reporting at Masrawy, a news website.
“In principle, the idea of listing military-owned companies is a good one. But it’s a dream that will take a long time to come true,” Mr Ramadan said.
Some question whether military-owned companies can go public. “Will there really be any transparency regarding their budget?” political and media analyst Hisham Qassim, a critic of the government’s policies, wrote in a Facebook post.
His five years in office have witnessed staggering growth in the military’s economic activity