Amid pressure from the International Monetary Fund to complete the Egyptian state’s full exit from the economy, the government announced, at the start of this June, the offering of a number of state-owned companies on the stock exchange before the end of next September, which will include four major divestment deals from state assets with total expected proceeds estimated at about $1.5 billion.

Prime Minister Mostafa Madbouly revealed during a press conference that the government had completed the temporary listing of 16 state-owned companies, with a plan to complete the listing of 4 other companies before 30 June this month, noting the start of temporary listing procedures for 10 companies in the petroleum sector in order to offer them on the stock market, and he stated that the government aims to offer 4 to 5 state-owned companies on the stock exchange before the end of 2026.

The Egyptian government is intensifying its efforts, in the current period, to implement the programme of divestment from state-owned companies and assets, by selling stakes to strategic investors or offering them on the stock exchange, as part of a wider package of economic reforms to which Cairo committed before the International Monetary Fund under a financing agreement worth $8 billion, which includes strengthening the role of the private sector and reducing the state’s direct presence in economic activity.

The Fund requires urgent structural reforms including accelerating divestment from non-strategic public business sector companies, improving public debt management, applying unified governance in state banks and companies, increasing non-oil tax revenues, and supporting the private sector by reducing government intervention, with the aim of raising growth to 4.8% and lowering inflation to 11.9% during the current year.

For his part, Dr Hussein Eissa, Deputy Prime Minister, said that the government aims to complete 10 divestment deals in the coming period, as part of implementing the State Ownership Policy Document and strengthening the role of the private sector in the economy, explaining during a panel session at the annual meeting of the American Chamber of Commerce that the government hopes to complete two new deals out of 4 companies affiliated with the Armed Forces, in addition to completing 6 additional deals before the end of the year, bringing the total number of companies targeted for offering or divestment to about 10 companies.

In the latest step on this track, the Egyptian government announced, a few days ago, the sale of the Gabal El-Zeit wind farm in the Red Sea region to the Emirati company Alcazar for $420 million, with total losses of about $150 million, as the station’s investments had cost $567.4 million, while the government explained that the proceeds will go towards reducing the debt.

Last April, the Financial Regulatory Authority announced the temporary listing of 6 state-owned companies on the stock exchange to pave the way for offering stakes in them, in compliance with the International Monetary Fund programme. They are “El Nasr Glass and Crystal”, “Alexandria Refractories”, “El Nasr Mining”, “Egyptian Alloys”, “Egyptian Pipes and Cement Products (Siegwart)” and “El Nahda Industries”; the first four belong to the “Metallurgical Industries Holding Company” and the last two to the “Chemical Industries Holding Company”.

This came about two months after the results of the fifth and sixth reviews last February, which revealed a slowdown in government divestment over the last two years amid the emergence of new entities affiliated with state bodies, according to the International Monetary Fund.

Assistant to the Prime Minister and Head of the State-Owned Companies Unit Hashem El-Sayed had stated last May that international institutions had noted that the state ownership document did not commit to divestment or retention, noting that the government is remedying those gaps with clear executive programmes.

Why Is the Divestment Project Delayed?

Dr Walid Gaballah, a member of the Egyptian Society of Political Economy and Legislation, tells Zawia3 that the slowdown in implementing the offerings programme, despite its having been among the components of the state’s economic programme for years, does not reflect a retreat or hesitation by the government, but comes within its keenness to achieve a “fair exit”, to ensure the best possible value for its assets when they are offered.

On the delay of some offerings, Gaballah believes that global economic conditions are unfavourable, as the global economy is suffering from a decline in foreign direct investment flows, which affects, according to Gaballah, the ability of various countries to attract new investments, not only Egypt, noting that the state is “biding its time” for the opportunity to offer assets and companies in a way that achieves the greatest possible benefit.

Gaballah considers the continued postponement of some offerings until now to be evidence that the state is implementing the structural reform programme according to the highest standards of governance and fairness, explaining that had the state wished to carry out a rapid or ill-considered exit, it would have done so years ago, as he put it.

For her part, professor of economics and political science Dr Alia El-Mahdi considers that the time is right for the government to divest, pointing out that international institutions, foremost among them the International Monetary Fund, have been calling for this approach for years, and that the right time for any economic reform is the time when the state takes the decision to implement it, while she considers that the delay in offering some companies because the necessary procedures or documents are incomplete is a technical and procedural matter that is distinct from the seriousness of the divestment decision.

She tells Zawia3 that the government can, alongside divestment and offering, set clear conditions to preserve the workforce, inject new investments and not lay off workers, in order to limit potential negative effects, explaining that if the government shows prudence and astuteness, as she described it, there will be no direct impact on citizens.

For his part, Mohamed Ramadan, an economic researcher at the Egyptian Initiative for Personal Rights, believes that the government offerings programme should not be seen as merely a response to pressure from the International Monetary Fund, describing the sale of companies as “complicated and takes a long time” because of the requirements of restructuring, asset valuation and choosing suitable investors, whether through direct sale or offering.

Mohamed Ramadan points out that the government does not reject the principle of selling or divesting, citing sales of stakes in major companies in past years, but he explains that the state may find that deals selling land and real estate assets (such as Ras El-Hekma) generate greater dollar returns than selling stakes in companies.

Ramadan explains that the wave of divestment and asset sales that Egypt witnessed in 2022 and 2023 was linked to financing pressures facing the state, which pushed it to accelerate some sales in that period to attract dollar inflows to support the balance of payments and secure external financing.

Agreeing with him, Dr Ibrahim Mostafa, an economic expert and former Vice Chairman of the Suez Canal Economic Zone, points out that implementing the government offerings programme faces technical and procedural challenges that he described as “complicated”, and noted that they may require considerable time and effort, reasoning that companies need precise valuation, due diligence and a comprehensive review of documents and balance sheets before being offered to investors.

He tells Zawia3 that the inventory of state-owned companies is not new, and that their data has been available to government bodies for years, but he explains in detail that the government is dealing not only with public business sector companies, but with a network of companies affiliated with various ministries and joint companies, which makes the process of inventory, valuation and selection more complicated, as he described it.

He adds that preparing just one company for offering may take between 6 months and a year, to review the financial statements and legal documents, appoint offering advisers and conduct the necessary studies on the situation of each company’s assets, workforce and financial obligations, explaining that these files require negotiations and complicated procedures that are not completed quickly.

At the end of 2023, Prime Minister Mostafa Madbouly announced that the government had achieved $5.6 billion in proceeds from divestment from government companies, to “involve the private sector despite the economic conditions Egypt is going through”, according to his statements, while targeting more offerings.

Warnings and Priorities

Dr Alia El-Mahdi warns against selling new assets to Emirati investors, pointing to the huge volume of Emirati investments in Egypt, and explaining that other alternatives are available, foremost among them Egyptian investors, but at the same time she stated that strategic and vital development projects should remain under state ownership, explaining that there is no need to divest from projects linked to national security.

El-Mahdi rejects the sale of land to foreigners, particularly in coastal areas, considering that the latter are linked to national security and should not be given up, while she says, regarding divestment from projects operating in strategic sectors, such as industries and traditional commercial activities, that the private sector can manage them efficiently.

She affirms that a public offering on the stock exchange is the best option, not a sale to an investor, pointing out that offering portions of shares to the public allows wider participation by investors and prevents ownership from being concentrated in the hands of a single party, and also gives citizens and investors the opportunity to participate in the ownership of companies with different stakes.

In this context, Mohamed Ramadan points out that the advantages of offering on the stock exchange go beyond merely providing liquidity, as it strengthens governance, transparency and disclosure within companies, making it a better option than closed sales to strategic investors.

Dr Ibrahim Mostafa, for his part, believes that the issue lies not in the principle of offering but in what he called “the jurisprudence of priorities”, meaning choosing the most suitable companies for divestment according to the needs of the economy and market conditions, attributing this to the readiness of the targeted companies (under any body) and their ability to attract investors.

He points out that the offerings programme aims to reduce the general budget deficit and allow greater room for the participation of the domestic and foreign private sector in economic activity, and he also believes that the state’s continued management of some loss-making or inefficient companies imposes additional burdens on public finances, noting that the available alternatives are privatising management or the partial or full offering of companies according to specialised studies and clear standards.

How Is the Government Moving to Complete the Divestment File?

As part of its plan to sell the assets of state-owned companies, the Egyptian government abolished the Ministry of Public Business Sector, in the cabinet reshuffle last February, 40 years after its establishment, and said the aim was “to rescue public companies from collapse and preserve their role in employing millions of Egyptians.”

Egyptian Prime Minister Mostafa Madbouly explained at the time that the decision “came within the framework of a vision put forward years ago, based on the idea that the ministry’s role was transitional by nature, and not permanent”, pointing out that “when he assigned the former Minister of Public Business Sector, he informed him that this ministry might be in its final stages, given that the aim was to reorganise the sector in preparation for a new phase”.

The ministry oversaw 146 state-owned companies operating in multiple sectors, representing about 26% of the total of 561 state-owned companies as of July 2025, according to a government document. Six holding companies operated under its umbrella in the fields of tourism and hotels, pharmaceuticals, chemical and metallurgical industries, spinning and weaving, and construction, while the document indicates that about 75% of the ministry’s companies were making profits, against 25% that incurred losses.

In return, the government established what is known as the “State-Owned Companies Unit”, a central body affiliated with the Cabinet, to regulate government companies; it oversees their inventory and valuation and the identification of those nominated for divestment, offering on the stock exchange or transfer to the Sovereign Fund of Egypt, while imposing unified governance controls on boards of directors and submitting quarterly reports, and it is headed by the Assistant to the Prime Minister.

The Egyptian state owns about 561 companies active in 18 economic fields, affiliated with 45 government bodies distributed among 19 ministries and 10 authorities, and spread across 16 governorates. The manufacturing sector tops the list of these activities with 175 companies, followed by the administrative and support services sector with 77 companies, then the transport and storage sector with 50 companies, then financial and insurance activities with 49 companies, and the real estate sector with 48 companies.

This distribution comes within the framework of structural transformations linked to the application of the State Ownership Policy Document, as the number of state-owned companies fell during 2025 from 709 to 561 companies, a decrease of 148 companies, equivalent to 20.9%, while on the other hand the number of owning bodies rose from 33 to 45, reflecting a reorganisation of the ownership structure and of the distribution of public assets.

Five holding companies recorded net profits at the end of 2025, while the “Metallurgical Industries Holding Company” led with revenues of about EGP 61.8 billion, of which about EGP 36.6 billion were exports, and the revenues of the “Construction and Development Holding Company” exceeded EGP 22.6 billion, while the “Spinning and Weaving Holding Company” recorded a net loss of about EGP 4.6 billion.

The companies’ profit margins varied in 2025, as the “Pharmaceuticals Holding Company” achieved the highest rate of return on assets among the six companies at 15.2%, followed by the “Metallurgical” at 26.3%, and the “Construction Holding Company” at 4.3%, while the net profit of the “Chemical” fell to about EGP 2.9 billion compared with higher previous years, while the “Tourism Holding Company” did not record any losses

for its subsidiaries for the first time in years.

The “Metallurgical” led the scene with executed investments of about EGP 3.8 billion, followed by the “Chemical” with EGP 2.3 billion and the “Pharmaceuticals” with EGP 1.5 billion, while the investments of the “Construction Holding Company” were modest at about EGP 322 million. It is worth noting that the “Tourism Holding Company” paid

by the end of 2025, to “sovereign bodies”, more than EGP 2.17 billion.

The Egyptian government is moving in light of compound economic crises that are swelling the bill of debts due for repayment during the current year, as estimates by international institutions indicate that debt maturities, especially external ones, range between about $60 billion and $70 billion, with a notable concentration of instalments in the first quarter, which deepens short-term financing needs and increases the sensitivity of the financial position to any external shocks or disruptions in capital flows.

Despite the government’s announcement of a reduction in the debt-to-GDP ratio of about 12% over the past two years, and the subsequent credit rating upgrade by “Standard & Poor’s” last October, for the first time in seven years, the debt service burden remained the most acute challenge. Official data indicate that debt service accounts for about 50% of total public expenditure, and about 72% of total revenues in 2024/2025, among the highest ratios among peer countries.

Between heavy external obligations and mounting financing pressures, the Egyptian government is pressing ahead with accelerating the programme of divestment from public companies and assets as one of the pillars of the economic reform agreed with the International Monetary Fund. And while the government sees the offerings as an opportunity to restructure the economy and strengthen the role of the private sector, debate remains over the optimal timing of implementation, the mechanisms for selecting the assets offered, and the impact of this on the domestic economy and social justice.

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