2023-06-20 02:07:11
Cairo, Egypt (CNN) — The Egyptian government has contracted with the International Finance Corporation – the arm of the World Bank Group to empower the private sector – to provide technical support and advice to the government offering program, and to assist in structuring and preparing the companies targeted for offering to the private sector, in order to achieve the government’s target of selling assets at a value of $40. billion dollars over 4 years.
Economists stressed the importance of this agreement in marketing the propositions program, with the expertise the Foundation possesses in this field, and at the same time providing financing to local and foreign investors, which contributes to the speedy implementation of the program.
The Egyptian government has previously announced the selection of 32 companies to sell shares or all of their shares until the end of the first quarter of 2024. The list includes companies operating in 18 activities, including 3 banks and two companies affiliated with the army.
Dr. Fakhry Al-Feki, Chairman of the Plan and Budget Committee in the Egyptian Parliament, said that the government chose the International Finance Corporation to provide technical advice for the government’s proposals program, in addition to providing financing for the local and foreign private sectors to participate in the program, adding that Egypt had previously signed a strategic partnership agreement with the Bank Group. International Organization for the provision of financing for development projects in Egypt worth 7 billion dollars over 5 years, including the allocation of 2 billion dollars to finance the private sector.
According to an official statement by the Egyptian government, “The International Finance Corporation will provide advisory services and technical support to determine mechanisms and models for government offerings for state-owned companies, and to identify target investors and the course of the offering process for each of the companies within the framework of the program.”
Al-Feki explained, in exclusive statements to CNN in Arabic, the reasons for choosing the International Finance Corporation to provide advice to the government to implement the proposals program, which are: “First, that the International Finance Corporation is the largest global development institution whose work is focused on the private sector, and secondly, that the institution has huge experience in empowering The private sector, especially in emerging markets, which contributes to building a strong, sustainable and resilient economy, in addition to achieving the state’s goals in expanding the participation of the private sector in the economy and creating more job opportunities.
Egypt previously signed a strategic partnership with the World Bank Group during the period from 2023-2027 to finance 15 projects in the sectors of education, health, transportation, social solidarity, housing, and food security, with a total value of $7 billion.
Fakhry al-Fiqi pointed out the importance of implementing the government’s proposals program to solve the foreign exchange shortage crisis, which Egypt has been facing since March of last year, pointing to the importance of Egyptian President Abdel Fattah El-Sisi’s statements that the state does not intend to further reduce the price of the pound once morest the dollar so as not to affect the imposition of Additional burdens on citizens, and Al-Fiqi stated that “these statements caused a decrease in the exchange rate of the dollar in the parallel market following dollar holders feared stopping speculations on the green, especially since the fair price of the dollar ranges between 26-30 pounds,” he said.
Egypt has cooperated with the World Bank Group since its founding in 1945, as one of the founding countries of the bank, and the latter contributed to financing 175 projects in various governorates of Egypt, with values exceeding $25 billion.
The head of the Parliament’s Plan and Budget Committee expected that new proposals would be implemented in the near future, reviewing the most prominent offers submitted to buy shares from government companies, including the Qatari offer to acquire Telecom Egypt’s 45% stake in Vodafone, and Gulf offers to buy a 30% stake in the holding company. For hotels – to be established to include the 7 largest government hotels – indicating that the Egyptians Abroad Company is seeking to buy a share in The United Bank, and other shares of companies offered for sale, provided that payment is made in dollars.
The government previously sold the Paints and Chemical Industries Company – Pachin to an Emirati company for $25 million, and sold a 10% stake in Telecom Egypt to local and foreign institutions for more than $120 million.
Rania Yaqoub, a member of the Board of Directors of the Egyptian Stock Exchange, said that increasing the private sector’s contribution to the national economy is one of the most important reasons for choosing the International Finance Corporation to work as an advisor to the government in managing the government offering program, appreciating this step to accelerate the pace of implementing the program, and to enhance the state’s credibility in its plan to exit the economy. in favor of the private sector.
It is scheduled that the International Finance Corporation, in cooperation with the Government Offering Program Unit within the Council of Ministers, will undertake the process of structuring the assets and preparing them for the offering, and this process includes strengthening the levels of corporate governance.
Yacoub added, in exclusive statements to CNN in Arabic, that the International Finance Corporation will take over all procedures related to the government offering program, starting with the structure of the assets of state-owned companies, preparing them for offering, marketing and promoting the program in international markets, and selecting private sector investors, in addition to benefiting from the expertise of the Finance Corporation. International cooperation with the private sector, which enhances their confidence in the implementation of the program.
Rania Yaqoub suggested that the second half of this year will witness more government offerings to companies included in the program or other state-owned companies, which may include the army’s Safi and Wataniya companies, or Telecom Egypt’s stake in Vodafone Egypt, and government banks.
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