Egypt pledges to accelerate privatization
The Egyptian government has again promised to boost the privatization effort and has assured the public the national economy is strong. Government officials renewed the privatization pledge during the Euromoney Conference held last week in Cairo.
Ministers said joint venture banks and companies would soon be sold, along with a 20 percent share in Egypt Telecom. The stock market will undergo comprehensive financial restructuring, and a state-of-the-art trading floor will be ready by the end of the year.
Government plans also include amending the legal framework for conducting business in Egypt. A new law for mortgages is being drafted and discussions for amending the codes for taxes and settlement of commercial disputes will be undertaken, several ministers said, all speaking on condition of anonymity.
But Economists in Cairo said most of the government's promises at the Euromoney Conference were a reiteration of unfulfilled promises made at least twice in recent years.
Economists said they hade hoped the government would announce specific dates it intends to sell shares of Egypt Telecom and specific joint venture companies or banks.
Ministers also assured the public and participants at the Euromoney Conference that the Egyptian pound, which has dropped in face of the US dollar, is strong. They said the monetary market would be further stabilized in the future.
Officials were trying very hard to portray a positive image of the Egyptian economy that has been in a slump.
However, Egyptian Finance Minister Medhat Hassanein said he was not satisfied with the government's management of the local debt. Hassanein said the debt - LE147 billion, less than 50 percent of the GDP - is owed mostly to the National Investment Bank.
The National Investment Bank finances loans through monies from pension funds, post office savings and investment certificates from the National Bank of Egypt. Hassanein said the National Investment Bank loans have interest rates averaging 11.5 percent, which is considerably higher than rates offered by local banks.
As a result, the ministry of finance established a debt management unit "to ensure that the government's financing needs and its payment obligations are met at the lowest possible cost and at a prudent degree of risk over the long run," said Hassanein.
Hassan Abdu, head of Horus Private Equity, a company which provides funds and development assistance to start-ups or money losing companies, said the Egyptian economy would benefit from companies like his. There are only there such companies in Egypt.
Abdu pointed to Edar.com, an Egyptian on-line real estate agency, as one of his company's success stories.
Another development in the financial sector is the establishment of MIBC Corporate Finance, a US$12 million financial group specializing in restructuring companies and providing financial consultation. The group is a joint venture between Concord Investment, Misr International Bank and the British investment band, ING Barings.
At the Euromoney Conference, participants announced the Cairo Financial Center project, to be established by businessman Mohamed Nosseir, chairman of Misrfone, which operates the mobile telephone network Click. This center will include a trading floor for the stock exchange, hotels, offices for brokerage companies and eight movie theaters. Total investment in the center is estimated at LE1.4 billion. – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)