Ahmed Kamel – Egypt Daily News
In a major shift aimed at redefining the state’s role in economic activity, the Egyptian government is moving forward with a comprehensive plan to reduce its footprint in a wide range of sectors and expand private sector involvement, according to an official policy document reviewed by Al-Shorouk’s business section.
The document, part of the “State Ownership Policy,” outlines a roadmap for strategic disinvestment from state-owned enterprises (SOEs) and a broader restructuring of government holdings across the economy. It reveals that as of July 2025, the Egyptian state owns or holds stakes in 561 companies, distributed across 45 government entities, including ministries, governorates, and affiliated public bodies.
Of these, 364 companies reported profits, while 78 posted losses. Another 14 broke even, and the financials for 105 companies are still being finalized. The data presents a complex but increasingly transparent picture of state capitalism in Egypt.
Capital Concentration and Ownership Patterns
The document shows that nearly half of the state’s owned enterprises, about 257 companies or 45.8% are majority-owned, with the state holding over 75% equity. In contrast, in 69 companies, the state’s stake is below 25%.
Capital-wise, 233 companies or 41.5% of the total have a registered capital of EGP 500 million or more, indicating a heavy concentration of state assets in large-scale enterprises. The next largest category includes 142 companies (25.3%) with capital ranging from EGP 100 million to under EGP 500 million.
Interestingly, most of the profitable companies fall within the highest capital bracket. About 161 companies—representing 28.7% of the total portfolio are both capital-intensive and revenue-generating, highlighting the commercial potential of larger, better-resourced public entities.
Strategic Divestment and Private Sector Empowerment
The government’s overarching aim is to transition from direct ownership and management of assets to a more strategic and financially efficient role. This includes a plan to completely exit 62 specific economic sectors and reduce its investments in 56 others. At the same time, the state intends to maintain or even increase its presence in 76 priority sectors, based on developmental and strategic considerations.
This reorientation is driven by multiple objectives: improving investment efficiency, reducing fiscal burdens, and fostering a more dynamic and competitive economic environment where the private sector can thrive. The state is shifting toward managing capital rather than enterprises, and is exploring clear, structured exit strategies—whether through partial or full divestment or by transferring management responsibilities.
By enabling broader private sector participation, the government hopes to increase the private sector’s contribution to GDP, employment, exports, and public revenues. This is seen as critical for achieving economic growth targets of 7–9% and raising investment levels to 25–30% of GDP.
Fiscal and Social Considerations
At the heart of this policy is a desire to ensure long-term fiscal sustainability. Reducing the financial burden of underperforming SOEs can free up resources to support social safety nets and buffer vulnerable populations against economic shocks.
Moreover, the shift comes in response to both domestic pressures and international lessons. The government has studied global experiences in state ownership and privatization, especially in the aftermath of recent economic crises. The resulting strategy is designed to shield the economy from external volatility while unlocking new avenues for growth.
Egypt’s State Ownership Policy marks a decisive step toward redefining the economic role of government. By scaling back its direct involvement and creating space for private investment, the state hopes to catalyze a new phase of inclusive and sustainable economic development. Whether this bold restructuring will deliver the intended results now depends on the execution and the response of investors at home and abroad.
