Since late last year, reports have intensified regarding the Egyptian government’s plan to transfer ownership of several state-owned companies to the Sovereign Fund of Egypt (SFE) in 2025. This move aligns with its commitments to the International Monetary Fund (IMF), which requires the sale of stakes in government-owned companies—whether fully or partially owned—to ensure equal competition between the public and private sectors. In this context, the IMF mission, during its fourth review of the $8 billion loan program, recommended that the Egyptian government strengthen the role of the private sector as a key driver of growth, ensure macroeconomic stability, and create sustainable job opportunities.
In December, Prime Minister Mostafa Madbouly announced the government’s intention to offer stakes in at least ten state-owned companies in 2025 through public offerings or sales to strategic investors. The list includes companies such as Egypt for Pharmaceutical Industries, Chemical Industries Development (CID) Pharmaceuticals, Al-Amal Al-Sharif for Plastics, and the Gabal El-Zeit Wind Power Station, in addition to Banque du Caire and Bank of Alexandria. The plan also includes listing “Wataniya” and “Safi,” both affiliated with the armed forces, on the Egyptian Stock Exchange by mid-2025, alongside “Silo Foods” and “Chill Out,” which are scheduled for offering by the end of this year.
Simultaneously, the government is preparing to transfer ownership of several companies to the Sovereign Fund of Egypt in the second quarter of this year in preparation for offering them to investors. In February, Minister of Investment and Foreign Trade Hassan El-Khatib stated that the transfer of government-owned companies to the fund would occur in phases to maximize returns on state assets. Meanwhile, Minister of Finance Mohamed Maait confirmed that the government aims to generate $6.5 billion from its privatization program by the end of 2024 to enhance its ability to meet financial obligations, increase the private sector’s role in the economy, and raise its share in public investments to 65% in the coming years.
According to economic reports, the government plans to transfer 370 companies to the sovereign fund as a first phase, focusing on profitable companies in the 2024/2025 fiscal year with simple ownership structures, while excluding companies with complex ownership entanglements among government entities and banks or those with intricate asset holdings. The fund will initially incorporate industrial companies, particularly those in manufacturing that support productive sectors, followed by real estate companies with large tracts of unused land. Meanwhile, loss-making state-owned companies—totaling 138—may undergo restructuring or a shift in operations at a later stage.
An official report on the status of state-owned enterprises reveals that the Egyptian government owns 709 companies under 33 government entities, with stakes exceeding 75% in 23% of them, equivalent to 163 companies. The report also indicates that 373 state-owned companies are profitable, while 138 are loss-making, with the financial statements of 198 companies still under review. Additionally, 34% of government-owned companies—equivalent to 238 firms—each have a capital exceeding 500 million pounds ($10 million). Meanwhile, 59 companies are listed on the stock exchange, representing 8.3% of all state-owned enterprises.
Regarding their distribution among ministries, the non-banking financial sector accounts for approximately 12% of total state-owned companies, totaling 85 firms. The Ministry of Public Enterprises oversees 309 companies, while the Ministry of Planning and Economic Development manages 88, and the Ministry of Supply oversees 51. The Ministry of Transport owns 46 companies, the Ministry of Housing 44, the Ministry of Civil Aviation 40, the Ministry of Military Production 39, and the Ministry of Petroleum and Mineral Resources 37. Meanwhile, the Ministry of Electricity manages only one company, while the Ministry of Communications oversees 20, the Ministry of Finance 19, and the Ministry of Religious Endowments (Awqaf) 15, while the Suez Canal Authority has stakes in 23 companies.
As part of the framework for regulating state ownership in businesses, the Cabinet approved a draft law in May aimed at implementing the State Ownership Policy Document. The law seeks to ensure governance in managing public assets, focus investments on vital sectors, boost local and foreign investment inflows, and guarantee fair market competition. It also aims to stimulate financial markets, enhance capital market liquidity, improve the performance of state-owned enterprises, promote transparency and governance, and maximize the utilization of national resources.
Don’t miss :Banning Contracts with Sovereign Entities: Transparency or Political Maneuver?
The Sovereign Fund of Egypt
The Sovereign Fund of Egypt (SFE) was established in 2018 under Law No. 177 to attract local and foreign investments through partnerships with the private sector and to optimize the use of state-owned assets by designing innovative investment products. In October 2024, President Abdel Fattah El-Sisi ratified amendments to the law governing the fund under Law No. 158 of 2024, granting it independent legal personality while keeping it under the supervision of the Cabinet of Ministers. The fund is headquartered in Cairo, with the option to establish branches or offices inside or outside Egypt by decision of its Board of Directors.
The fund is overseen by the Minister of Investment and Foreign Trade, while a General Assembly, formed by presidential decree, supervises its activities. This assembly is chaired by the Prime Minister and includes the Minister of Finance, ministers responsible for investment, international cooperation, and planning, one of the Deputy Governors of the Central Bank, and seven experts specializing in finance, economics, law, and fund management, nominated by the Prime Minister. The experts serve four-year terms, renewable once.
According to Article 4 of the law, the authorized capital of the fund is 200 billion pounds ($4 billion), while its issued capital is 5 billion pounds ($100 million), with 1 billion pounds ($20 million) initially paid from the state treasury at its inception. The remaining amount is to be paid in accordance with investment plans over three years. The law also allows for capital increases in cash or in-kind under the regulations stipulated in the fund’s bylaws.
According to the International Forum of Sovereign Wealth Funds in Africa, the Sovereign Fund of Egypt ranks second in the region in terms of asset size, with total holdings of $12.7 billion. In February 2024, SFE CEO Ayman Soliman announced that the fund’s paid-in capital would surpass 100 billion pounds ($2 billion) following the addition of 20 new assets, including Misr Insurance Holding Company, which was fully transferred to the fund in March 2023.
Between March 2022 and December 2024, the Egyptian government executed 34 divestment transactions as part of the state privatization program, involving either full or partial exits from state-owned companies. These transactions generated more than $30 billion in proceeds.
The privatization program has become a cornerstone of Egypt’s economic policy, aimed at strengthening the private sector, attracting institutional investments, and improving market liquidity. Additionally, the program seeks to restructure state assets and enhance financial market performance. Reinforcing this approach, Minister of Planning and Economic Development Hala El-Said announced in a December 2023 press conference that final agreements had been signed for the public offering of seven historic hotels, in partnership with the Sovereign Fund of Egypt, as part of a broader initiative to maximize public asset investments.
The Egyptian Exchange (EGX) is expected to witness a record number of initial public offerings (IPOs) in 2025, driven by both government and private listings. This initiative is part of a broader strategy to revitalize the market, increase the number of listed companies, and boost the market capitalization of the EGX as a percentage of GDP. The government aims to expand investment opportunities, enhance liquidity, and improve Egypt’s attractiveness to foreign investors, reinforcing its commitment to economic reform and sustainable development.
Don’t miss: Hot Money Drains Egypt’s Economy
Changing the Concept of Public Funds
Mohamed Ramadan, an economic researcher at the Egyptian Initiative for Personal Rights, explains that in previous sales to foreign sovereign funds, the Sovereign Fund of Egypt (SFE) acted as the seller, shielding foreign investors from bureaucratic obstacles due to its reduced oversight and operation under a different legal framework. The fund also played the role of an intermediary in asset sales to Gulf countries and was responsible for the legal collection of contracts. He argues that the primary function of the sovereign fund is to resolve the legal complexities surrounding the definition of public funds, determining who has the right to sell assets and how deals should be evaluated. The fund’s main activity revolves around transferring public ownership to itself, so that—by law—the assets no longer fall under public ownership. This ensures that contracts with investors are legally protected, shielding them from legal challenges to privatization. Egypt has a long history of such objections, particularly in administrative courts.
Speaking to Zawia3, he states: “Egypt is continuing its asset sales. The State Ownership Policy Document includes around 39 companies in the privatization program approved in 2016, with agreements renewed to continue these offerings. This aligns with the IMF’s recommendations to expand the private sector’s role. The sale of state-owned companies is expected to negatively impact workers’ rights, as state employees typically receive higher wages and better working conditions compared to their private-sector counterparts. Investors may resort to corporate restructuring, which could lead to job cuts.”
The researcher emphasizes that the number of state-owned companies—exceeding 700—is too large to be fully transferred to the sovereign fund or included in privatization offerings. He raises key questions:
“Will the fund pay the owning ministries upfront? Or will it wait until the assets are sold before transferring the proceeds? And where will the revenues from these deals ultimately go?”
He adds that Egypt already has privatization laws, yet there remains an unclear aspect in these regulations. This ambiguity makes sales through the Sovereign Fund of Egypt more favorable than direct sales by ministries and government agencies to investors.
Corporate Governance and the Post-Fund Phase
MP Abdel Moneim Imam, head of the Justice Party and Secretary of the Budget and Planning Committee in Parliament, told Zawia3 that both international and domestic reports, as well as numerous parliamentary voices, have raised concerns about state competition with the private sector and the declining role of private enterprise in Egypt’s economy. He argues that state withdrawal from economic activities is necessary, but the mechanisms of implementation and transparency are crucial. He notes that the government is compelled to offer profitable state-owned companies for investment, rather than loss-making ones, as selling them in their current state would lead to undervalued transactions. Instead, he stresses the need to merge, restructure, or turn them profitable before listing them on the stock exchange or offering them through public-private partnerships to avoid repeating past privatization experiences where loss-making firms were sold at low prices, triggering widespread criticism and corruption allegations.
He adds:
“My position on the Sovereign Fund of Egypt (SFE) and its legal amendments is well-documented in parliamentary sessions. The advantage of the fund is that it leans toward the private sector and circumvents bureaucratic hurdles, making it more attractive to investors. I support the state’s withdrawal from non-strategic sectors because full state ownership weakens oversight, reduces competition, and leads to lower quality, administrative inefficiency, massive financial losses, or monopolistic practices. Delaying privatization is a major mistake, but transparency and disclosure rules must be clear, especially concerning assets that Egyptians consider their right and the inheritance of future generations. We will wait for an official decision on company transfers and then hold a parliamentary session after the budget discussions, with the Minister of Investment, as the official responsible for the sovereign fund, to present the fund’s plans for these companies.”
Imam believes that the real issue is not the transfer of state-owned companies to the Sovereign Fund of Egypt, but what happens afterward—specifically, corporate governance. Corporate governance refers to the rules and standards governing the relationship between a company’s management, shareholders, and stakeholders. He raises concerns about how the companies will be sold, emphasizing that transferring firms to the sovereign fund does not necessarily mean they will be privatized immediately. Instead, it grants greater flexibility to form partnerships with the private sector and international institutions, shielding the fund from bureaucratic delays.
However, he expresses concern that companies transferred to the fund may remain stagnant, without being listed for investment, sold on the stock exchange, or integrated into the economy. He draws a parallel with public lands that were transferred to the fund years ago but remain undeveloped. He stresses that the biggest challenge is maximizing asset value, integrating the private sector, and listing them on the stock exchange, while allowing Egyptians to purchase shares. He points out that previous stock market listings of state-owned companies were transparent and accessible to multiple investors, even if some faced financial difficulties later. In contrast, direct sales to a single investor or a specific country, despite fetching high prices, have often sparked concerns over transparency.
MP Sanaa El-Said, a parliamentarian from the Egyptian Social Democratic Party, does not oppose the government’s strategy of increasing private sector involvement through the transfer of state-owned assets—including ministries, government buildings relocated to the New Administrative Capital, and state-owned companies—to the Sovereign Fund of Egypt in preparation for investment offerings. She insists on expanding efforts to attract both local and international investments into the Egyptian market. However, she stresses that investment regulations must ensure that the state retains a majority stake in these assets and companies, while private investors and businessmen should hold minority stakes, not the other way around.
Speaking to Zawia3, El-Said also expresses reservations about the sale of profitable state-owned enterprises while keeping loss-making companies under government control. She suggests that a stake in EgyptAir should be offered for investment to halt its financial losses, which cost the Ministry of Finance substantial amounts annually. However, she insists that the state must retain a controlling stake to safeguard national interests.
Don’t miss: Fears Grow Over Cancelling In-Kind Subsidies in Egypt
Unregulated Privatization
Political writer and researcher Ammar Ali Hassan, a professor of political science, argues that these measures represent a hybrid of nationalization in favor of political authority rather than the people and privatization without oversight. He explains that the Sovereign Fund of Egypt (SFE) operates under a legal framework that places it beyond accountability and scrutiny. This means that state-owned companies can be sold after being transferred to the fund, and according to SFE regulations, Egyptians have no right to access information regarding the transaction value, sales process, or the identity of the buyer. Furthermore, they cannot legally challenge contracts or hold those responsible for the sale accountable, even if the deal proves unprofitable for Egypt.
Hassan draws a comparison with the privatization deals under former President Hosni Mubarak, which were often marred by bribery and large-scale corruption, leading to state assets being sold at undervalued prices. However, during that period, the proceeds of these sales were at least directed to the state budget. In contrast, under the current system, the revenues from asset sales now go directly to the sovereign fund, which follows a different financial strategy.
He adds that while the IMF has encouraged Egypt to expand privatization and increase the private sector’s role in the economy, it has not specified the method of sale. Instead, the Egyptian authorities have unilaterally chosen to bypass general economic laws in favor of the fund’s exclusive legal framework. According to Hassan, such procedures are unprecedented in Egypt’s modern history—neither under the socialist policies of Gamal Abdel Nasser, the economic openness of Anwar Sadat, nor the privatization wave under Mubarak.
