Egyptian Government Partners with International Finance Corporation to Empower Private Sector and Sell Assets

Title: Egyptian Government Partners with International Finance Corporation to Sell Assets Worth $40 Billion

Cairo, Egypt (CNN) – In a significant move to boost the private sector and accelerate economic growth, the Egyptian government has entered into a contract with the International Finance Corporation (IFC), the arm of the World Bank Group, to provide technical support and advice for its government offering program. The program aims to sell assets valued at $40 billion over a span of four years.

The agreement with the IFC is expected to play a crucial role in marketing the program and attracting both local and foreign investors. The IFC’s expertise in this field, coupled with its ability to provide financing, will contribute to the speedy implementation of the program. Economists have emphasized the importance of this partnership in achieving the government’s target and addressing the foreign exchange shortage crisis that Egypt has been facing.

Under the government offering program, the Egyptian government has already selected 32 companies to sell shares or their entire stake by the end of the first quarter of 2024. These companies operate in various sectors, including banking and those affiliated with the army. The IFC will provide advisory services and technical support to determine the mechanisms and models for offering state-owned companies, as well as identify target investors and guide the offering process for each company.

Dr. Fakhry Al-Feki, Chairman of the Plan and Budget Committee in the Egyptian Parliament, highlighted the reasons for choosing the IFC as the advisor for the government’s proposals program. He emphasized that the IFC’s focus on the private sector, along with its extensive experience in empowering the private sector in emerging markets, will contribute to building a strong and resilient economy. This partnership aligns with Egypt’s goals of expanding private sector participation in the economy and creating more job opportunities.

This collaboration between Egypt and the IFC builds upon their existing strategic partnership. Egypt had previously signed an agreement with the World Bank Group to finance development projects worth $7 billion over five years, with a specific allocation of $2 billion for private sector financing. The IFC’s involvement in the government offering program further strengthens this partnership.

Rania Yaqoub, a member of the Board of Directors of the Egyptian Stock Exchange, emphasized the importance of increasing the private sector’s contribution to the national economy. She praised the choice of the IFC as an advisor to the government, stating that it will accelerate the implementation of the program and enhance the state’s credibility in transitioning towards a more private sector-driven economy.

The IFC, in collaboration with the Government Offering Program Unit within the Council of Ministers, will undertake the process of structuring the assets and preparing them for offering. This process will also involve strengthening corporate governance levels. The IFC will handle all procedures related to the program, including marketing and promoting it in international markets, selecting private sector investors, and benefiting from its expertise in international cooperation with the private sector.

Looking ahead, 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. Potential offerings may include the army’s Safi and Wataniya companies, Telecom Egypt’s stake in Vodafone Egypt, and government banks.

The partnership between the Egyptian government and the IFC marks a significant step towards achieving economic growth, attracting investments, and expanding the role of the private sector in Egypt’s economy. With the IFC’s support and expertise, the government offering program aims to unlock the potential of state-owned assets and drive sustainable development in the country.

What role does the IFC play in marketing the government’s offering program and attracting potential investors to Egypt’s state-owned companies

With the IFC in 2018 to support the country’s private sector and enhance its investment climate. The current partnership to sell assets worth $40 billion is seen as a continuation of this effort.

Egypt has been working towards attracting more foreign investments and boosting its private sector to drive economic growth. The government offering program aims to privatize state-owned companies and attract investors to these assets. By partnering with the IFC, the Egyptian government hopes to leverage the organization’s expertise and financing capabilities to successfully implement the program.

The IFC’s role in marketing the program and attracting investors is crucial. With its experience in empowering the private sector in emerging markets, the IFC is expected to assist in determining the best mechanisms and models for offering state-owned companies to potential investors. This will help identify target investors and guide the offering process for each company.

The collaboration between Egypt and the IFC is also seen as a strategy to address Egypt’s foreign exchange shortage crisis. By selling assets worth $40 billion, the government aims to bring in much-needed foreign currency and strengthen the country’s economy.

Overall, this partnership between the Egyptian government and the IFC highlights the government’s commitment to accelerating economic growth and expanding private sector participation in the economy. With the IFC’s support, Egypt aims to build a strong and resilient economy while creating more job opportunities for its citizens.