Boosting the Economy and Easing Pressure on the Egyptian Pound
The stake sales of state assets are expected to accelerate following the recent presidential election. These sales are seen as crucial to Egypt’s efforts in attracting much-needed dollars, easing pressure on the Egyptian pound, and implementing economic reforms as part of an IMF loan program. It is worth mentioning that the program to offload assets has faced obstacles in the past, with the state and military still dominating the Egyptian economy.
Details of the Hotel Portfolio Deal
The portfolio of hotels deal grants TMG a 39% stake, with the right to increase its share to 51%. The cabinet confirmed this arrangement in a statement. Hisham Talaat Mostafa, CEO of TMG, mentioned that other international investors would also contribute capital to the TMG holding company. The hotels in question, dating back to the late 19th or early 20th centuries, include the Cataract in Aswan, the Winter Palace in Luxor, the Mena House in Cairo, and the Cecil in Alexandria.
Focus on Sector-Specific Divestments
In addition to the hotel deal, the government, in collaboration with the International Finance Corporation, has conducted preliminary studies on divesting 50 companies. The priority sectors for divestment include airports and telecommunications. Such divestments aim to attract investments and foster growth in these sectors.
IMF Loan Program Adjustments and Ongoing Talks
Egypt’s $3 billion financial package with the IMF encountered obstacles after the country failed to let its currency float freely and make progress in the sale of state assets. As a result, around $700 million in disbursements due in 2023 were delayed. However, the IMF has indicated that it is in talks to expand the package due to the economic risks resulting from the Israel-Hamas conflict. The emphasis of the IMF has shifted towards inflation targeting rather than exchange rate policies. Prime Minister Madbouly confirmed that talks with the IMF are ongoing, and a new timeline will be announced soon.