The Egyptian government has announced a plan that will give investors the chance to secure a majority stake in some firms controlled by the National Service Projects Organization (NSPO), which is affiliated with the defence ministry. This new plan could be a response to El-Sisi’s previous suggestions that military-affiliated firms should go public.
The announcement, which came on Monday, 3rd of January 2020, indicated that the country may be offering a 100 percent stake in some of its military-affiliated firms in attempts to attract investors and boost growth in the private sector.
According to Ayman Soliman, Chief Executive Officer of Egypt’s sovereign wealth fund, the fund will help the NSPO select listed firms and market them to investors and possibly invest in them also. Experts have said that the plan would “perk up Egypt’s investment climate, raise a huge amount of capital and increase investors’ confidence in the national economy.”
Since the emergence of President Abdel-Fattah El-Sisi as Egypt’s head, most public companies that were primarily set up to provide military supplies have engaged in other economic activities, venturing into markets that had been the exclusive domain of the private sector and the government.
For instance, Maadi, a company which was established in 1954 to manufacture grenade launchers, pistols and machine guns has in recent times ventured into greenhouses, production of medical devices, power equipment and gyms with further expansion plans. It has over a thousand employees on its payroll. As of 2018, the company had carried out a 495 million Egyptian pound ($28 million) project for the Ministry of Electricity and an Algerian agricultural waste recycling contract worth $400,000.
The North African country’s economy has struggled for years since the revolution that toppled the reign of its former ruler, President Hosni Mubarak in 2011. But, the El-Sisi administration has been able to engineer a turnaround of the economy through sweeping economic reforms introduced about four years ago. These reforms, which are tied to a $12 billion three-year IMF program signed in November 2016 should lay the ground for the expected economic expansion. But foreign investors are still shying away from Egypt over a perceived lack of transparency on the part of the government.