Egypt’s asset sales are struggling. Why is that? 

Egypt’s government is strictly controlling the country’s economy. Even though it agreed to the International Monetary Fund’s request to moderate its involvement and give private companies more leeway, that’s not the case yet. Instead, several moves showed recently that the authorities are tightening their control, as well as expanding their holdings.

In October, the IMF announced that the country would receive a $3 billion financial support package over the next 46 months. Egypt is committed to enhancing the existing commercial environment in the nation and providing more assistance to the private sector. Thus far, the public sector was much more privileged, making it hard for independent businesspeople to thrive. The country also agreed to reduce the state and military’s role in various non-strategic areas.

Economists think that Egypt needs to move from privatization, especially after several economic shocks it suffered. It should start economic reform as soon as possible to avoid further difficulties. Moreover, this progress might determine whether it manages to recover from the current financial crisis or not. Russia’s invasion of Ukraine and ongoing war greatly contributed to the latter, making the country more vulnerable.  

Still, this isn’t the first time the government embarked on a similar plan. But the former ones haven’t been successful. The authorities haven’t delivered the promised reforms, nor have they started working on those privatization plans.

What do the experts say? 

Analysts think that the government has plenty of room for manoeuvres, given the current state ownership policy. The IMF considers it a key commitment. Yezid Sayigh, the senior fellow at the Carnegie Middle East Center in Beirut, noted that most of these talks are directed to justify a massive state intervention in various sectors, which Egypt’s government thinks to be strategic.

In December, the authorities issued a new regulation. According to it, people intending to set up any of the 83 economic activities would need to apply to security directorates to get written permission.