Egypt announces deals to sell $1.9 billion in state assets in its privatization push

CAIRO (AP) — The Egyptian government said Tuesday that it had inked a series of deals to sell off $1.9 billion worth of stakes in state-owned companies, in a move that promises to bolster Egypt's ailing private sector.

Prime Minister Mostafa Madbouly said in a televised news conference that the government received $1.65 billion and the equivalent of $250 million in Egyptian pounds in the sales. Madbouly said the sales included an unspecified amount of shares in the country's large state-owned communications company, Telecom Egypt.

Among the other sales outlined in Tuesday's presser was a deal to sell off stakes from 25% to 30% in the chemicals company Elab, petrochemicals firm Ethdyco, and petroleum firm Egyptian Drilling Company to the Abu Dhabi Development Holding Co. for $800 million, according to Planning Minister Hala el-Said.

Neither minister specified how many state companies were involved in the $1.9 billion worth of sales or when the agreements were reached.

The move is part of a major privatization reform to sell stakes in at least 32 state-owned companies, from petrochemical firms to major banks, in a bid to downsize Egypt's public sector. The plan was first unveiled in January.

The program is a key goal of a $3 billion bailout package that Egypt secured from the International Monetary Fund in December to help the cash-strapped North African economy weather recent shocks to the global economy, including the COVID-19 pandemic and Russia’s war in Ukraine.

Since the war in Ukraine began in February 2022 the Egyptian pound has lost over 50% of its value against the dollar, with annual inflation reaching over 36% last month. Egypt, a country with over 105 million people, is the world’s largest wheat importer. Most of its wheat imports traditionally come from Ukraine.

In recent months, the Central Bank of Egypt has tried to contain inflation, including raising its main interest rate and devaluing the Egyptian pound

According to government figures, over a third of Egyptians live in poverty.

Madbouly said similar deals worth around $1 billion will soon be announced.