Egypt to create a sovereign fund to manage public business sector
Public business sector will directly follow Egypt's cabinet after the merger of the ministries of investment and foreign trade and industry
Ahram Online, Tuesday 4 Mar 2014
Omar Effendi (Photo: Al-Ahram)
Nine Egyptian public holding companies and their subsidiaries will soon be under an independent sovereign fund.
The fund to restructure the public companies will be managed directly by the prime minister's cabinet, said Hisham Ramez, governor of Egypt's Central Bank (CEB), following a meeting with newly appointed Prime Minister Ibrahim Mehleb.
Egypt's public sector was formerly under the investment ministry, which was recently merged with the ministry for foreign trade and industry following last week's cabinet reshuffle to form a tripartite bureau – Ministry of Investment, Foreign Trade and Industry.
Mounir Fakhry Abdel-Nour – appointed head of the tripartite ministry last week – has refused to take charge of the public sector, wanting instead to focus on promoting investment, foreign trade and industry, according to an official source speaking with Ahram Online.
Managing Egypt's public sector is not an easy task – several companies lose money every year while labour strikes have spread throughout the sector's workers, many of whom are angry at an apparent loss of advantages once gained during the era of former president Gamal Abdel-Nasser.
Moreover, Egypt's administrative court has ordered several private companies to be renationalised based on workers' demands and is still investigating other cases. Some of the companies have returned to the public sector, while the fate of others is still unclear, as investors can resort to international arbitration.
In 1991, Egypt announced the beginning of a privatisation programme with the ambitious aim of privatising all of its 314 public companies before the start of the third millennium.
At this time, Egypt's public business sector was under the public sector ministry, which lasted until the creation of the investment ministry in 2004. Then-investment minister Mahmoud Mohieddin launched an asset-management programme to activate the privatisation scheme.
In 2008, Mohieddin along with Gamal Mubarak, son of ousted president Hosni Mubarak and secretary of the ruling National Democratic Party's (NDP) policy committee, announced a proposal to adopt a voucher privatisation – or mass privatisation programme – which was largely rejected at the time.