Egypt receives $1.9 billion from sale of state-owned companies

Egypt has signed $1.9 billion in deals to sell state-owned companies, the government announced on Tuesday as it continues to navigate the economic crisis.

Egyptian Prime Minister Mustafa Madbouly said the government has received $1.65 billion for selling shares in state-owned firms, as well as the equivalent of $250 million in Egyptian pounds, the state-owned news outlet Al-Ahram reported.

Among the investors was the United Arab Emirates’ sovereign wealth fund, ADQ, which bought $800 million in minority stakes in Egyptian Ethylene and Derivatives Company, National Drilling and Egyptian Linear Alkyl Benzene. Some other investors are Egyptian. The Alexandria-based Talaat Moustafa Group made a $700 million investment in state-owned hotels, according to Bloomberg.

Background: Egypt announced its intention to sell several state-owned firms last year in response to its economic crisis. Earlier this year, the government unveiled its plan to sell shares in the firms via direct sales to investors and on the Egyptian exchange.

Egypt’s economy has been reeling from inflation, the devaluation of the Egyptian pound, and other problems for more than a year. On Monday, the government reported a record high 36.8% in annual inflation for the month of June. The inflation is partly related to the supply chain disruptions following the Russian invasion of Ukraine in 2022. Egypt imported most of its grain from both countries before the war. 

Why it matters: Egypt has especially been seeking help from the Gulf to prop up its economy. Qatar transferred $1 billion to Egypt’s Central Bank last November, following a $3 billion deposit earlier last year. Saudi Arabia deposited $5 billion in the bank in May of 2022. The United Arab Emirates also signed a $10 billion investment partnership with Egypt and Jordan at the time.

However, Gulf states have recently expressed reluctance to further assist Egypt.

“With Egypt, it’s purely commercial — just giving grants and charities are no longer the case for Qatar,” Qatari Finance Minister Ali Al-Kuwari told Bloomberg in May.

In January, Saudi Finance Minister Mohammed Al-Jadaan said the kingdom will no longer give foreign aid “without strings attached.”

“We used to give direct grants and deposits without strings attached, and we are changing that,” Al-Jadaan said at the World Economic Forum. “We are working with multilateral institutions to actually say we need to see reforms.” 

The message was partly directed at Egypt, Al-Monitor reported at the time.