Cairo, Egypt (CNN) – The Egyptian government has launched a community dialogue on the state ownership policy document, which identifies the economic sectors it has decided to maintain or withdraw from its assets, in addition to defining the role of Egypt’s sovereign wealth fund in partnership with the private sector.
Experts praised the Egyptian state’s move to abandon asset management and provide investment opportunities for the private sector to increase its contribution to economic activity while maximizing returns on state assets and avoiding government competition with the private sector.
This came after businessmen had previously complained about the difficulty of competition in the Egyptian market in light of the government displacing the private sector in various economic activities.Its contribution to economic activities and managing the state’s presence in economic activities increase.
Mohamed El-Bahi, a member of the Board of Directors of the Federation of Egyptian Industries, said that during the last period the government has pumped large investments to establish important projects that the private sector is reluctant to implement. Because it is long-term and does not have a high return, and after the state puts the projects on the production path, it will allow the private sector to participate, either in whole or in part, for an economic benefit for both to achieve. parties.
The Egyptian government intends to offer a number of state-owned companies to the stock exchange through the public offering program, in whole or in part, to take advantage of the expansion of the ownership base and the transformation into public joint-stock companies, and thus the level of economic performance of these companies, the improvement of their capital, and levels of commitment to standards of governance, disclosure and transparency.
Al-Bahi, in exclusive statements to CNN in Arabic, stressed the importance of encouraging foreign investment, especially in light of Egypt’s need to increase foreign cash reserves to face the decline following the exit of indirect foreign exchange investments, and points to the most prominent projects that the state will propose, and is expected to witness a rise of investors such as hotels, business sector companies, ports and transportation.
According to statements by Egyptian Prime Minister Mostafa Madbouly, the government intends to merge 7 hotels under the umbrella of one company and place them on the stock exchange.
Regarding guarantees that citizens will not be affected by the private sector’s control of economic activities, Muhammad Al-Bahi said that the government has mechanisms and oversight bodies, even in the light of the application of the market economy, to control economic activities monitor, regulate their work, and prevent any monopolistic practices by its competent agencies such as the Competition Protection and Anti-dumping Agency. The laws of these devices have been amended during the last period to ensure the implementation of this role.
The state ownership policy document identified its exit from a number of sectors within 3 years, particularly the agricultural sector, drinking water and sanitation, communications and information technology, accommodation services, food and beverage services, as well as retail, construction and building activities, with the state still below average social housing provided.
Medhat Nafeh, an expert on economics and finance, said the government had introduced a state ownership policy document to clarify the trends and perceptions of the state regarding various economic activities to the private sector, and not to supplant projects. , adding that the government has benefited from international experience, including evidence from the Organization for Economic Co-operation and Development in the preparation of this document.
Nafeh explained in exclusive statements to CNN in Arabic that the Egyptian economy has gone through various forms in recent years, beginning with the royal era, when the state was at the time satisfied with the role of creating and building canals, dams and barricades, who left the private sector and feudal lords to run economic activity, then during the Nasser era it turned to take over the management of services and companies, and then in the early seventies we started to partially run the economy liberalize and provide an opportunity for the private sector without resorting entirely to a market economy, adding that this document is an introduction to the realization of the constitutional articles that provide for the empowerment of the private sector on the one hand, and on the other hand the competitive neutrality of the state in any sector, which means maintaining the same standards of competition with local and foreign priv provide sector in any sector in which it invests.
Medhat Nafeh, who attended the conference announcing the Prime Minister’s presentation of the document, noted that the government has been preparing this draft since last year, and has formed several government committees to prepare it, and the Prime Minister has it was presented for community dialogue, to receive suggestions and inquiries from the private sector for a period of 3 months, after which it was finally abandoned. .
Nafeh believes the government’s continuation of financial intermediation and insurance activities is an unnecessary repression, and he has submitted his opinion to the government, but he sees the importance of the state’s continuation in services and infrastructure activities, and other sectors he fears the private sector will be unique in practicing monopolistic practices that harm the Egyptian citizen.
Regarding the most prominent sectors in which the private sector sees investment opportunities, the economist said that all the sectors offered have many investment opportunities for the private sector, on top of that water desalination projects, renewable energy and many other activities that were the monopoly. of the state, and their exit from them enables the private sector to invest in them and achieve a return.Good either through participation with the state or participation in the administration.
He pointed to the need for the state to define a clear mechanism for retirement, and explained that achieving it requires the stock exchange to be activated to provide a mechanism for retirement, good asset prices and the increase of capital, in order to provide more jobs, and thus the state must work to take care of them in view of the fact that it is suffering from conditions which are currently difficult due to weak trading volumes and a small number of listed companies.