Egypt welcomes the private sector's investments in public companies whether through participation or as strategic investors or through the IPO, announced Minister of Public Business Sector Hisham Tawfik.
Speaking at the "Towards an Effective and Fair Partnership between the Public and Private Business Sectors" conference organized by Alam al-Mal, he asserted that companies require development in order to maintain a presence.
In September, the Ministry of Finance said the government would launch a planned program of more than 20 companies to sell 4.5 percent of Eastern Tobacco Company shares in the stock exchange to raise about $112 million. Egypt is targeting an amount of over $500 million.
However, the government postponed offering the program after the Egyptian stock market was affected by the crisis in emerging markets. It said it would consider issuing again during the first quarter of next year if the market improves and the liquidity crisis in emerging markets recovers.
Many companies have already emerged from the global and local market in many sectors, especially after technological developments that have gained considerable momentum among people, however, some heads of companies have retained the old model that rejects technology.
The minister also addressed the issue of chairmen remaining in their position for a long time, saying, “there is a difference between the developer and the investor...The developer must specify the time of his entry into the company and the time he leaves” in order to give others the opportunity to use new management models which bring revenues and profits to peak levels.
Tawfik, who comes from a financial markets background through the establishment of a securities trading company and a company in the solar energy sector, said that there is no “strategic industry" the state must preserve.
He explained that the requirements of national security, not strategic reasons, require the state's presence in the pharmaceutical industry and in part of the food industry. He also pointed out that the textile industry in the country needs foreign expertise in dyeing and processing, which the government is now seeking.
"We are looking for a partner in the automotive industry to manufacture cars here in Egypt instead of just assembling them," Tawfiq said of the car industry. He referred to Morocco’s experience with French company Renault, which currently produces around 300 cars a year in Morocco, and aims to double it next year.
Head of Public Private Partnership Central Unit Ministry of Finance, Atef Hanoura pointed to the importance of partnerships between government and private companies, stating the possibility of transferring Egypt’s experience in this field to neighboring countries.
Executive Director of General Authority for Investment, Mohsen Adel said that the Authority is currently working to facilitate government procedures for investors by linking all state institutions together, as well as introducing electronic voting systems in the companies’ general assemblies.
Head of Alam al-Mal, Aysar al-Hamidi stated the government provided a suitable environment to attract foreign and Arab investment, whether directly or indirectly, but the current conditions of global markets and the crisis of emerging markets prevented the government from attaining the target.
The government aims to attract about $10 billion in foreign investment in the current fiscal year, while it made about $6 billion last year.
