Hala Al-Saeed, acting planning minister, announced in an interview with Bloomberg that Egypt will launch its first sovereign wealth fund, called Egypt Fund, by the end of the year and will start a promotional tour for it in the first half (H1) of next year to draw private investments.
Al-Saeed explained that the fund will have an authorised capital of EGP 200bn ($11.34bn) and will start with a paid-up capital of EGP 5bn, 20% of which will be injected by the government when it is set up.
“Egypt has a wealth of assets and companies that have not been properly used and [have been] mismanaged over many years, and we are ready to start a real partnership with the private sector to render them productive and more advanced,” the minister said.
She added that the fund will seek to attract domestic and foreign investments through partnering with the private sector.
Al-Saeed revealed that the private sector will be allowed to buy stakes of more than 50% of sub-funds and companies belonging to the sovereign fund, which will be wholly owned by the state.
The fund will initially invest domestically in priority sectors such as tourism, manufacturing, petrochemicals, pharmaceuticals, and agribusiness that offer the potential for quicker returns, but could later explore international opportunities, Al-Saeed asserted.
In April, Al-Saeed announced that the government approved a draft law to establish the sovereign fund with a capital of EGP 200bn.
She continued in a press conference at the council of ministers in April, that the fund aims to manage and exploit the assets of the state.
Meanwhile, the Ministry of Planning ended mid-last month the preparation of the fund’s law, according to Al-Saeed.
In March, the minister of public sector affairs said that Egypt was considering setting up a sovereign wealth fund to run state-owned companies as it headed to partially floating several of them on the stock exchange.
Noteworthy, Egypt’s foreign reserves have been increasing since the country clinched a $12bn loan from the International Monetary Fund (IMF) in November 2016.
However, the reserves had dropped to about $19.041bn at the end of October 2016, before the signing of the IMF deal, according to the Central Bank of Egypt (CBE).
Nevertheless, the CBE announced in April that Egypt’s foreign reserves recorded $44.03bn in April 2018 for the first time in history, up from $42.61bn at the end of March.