CARIO: There was a fierce bidding war before victory went to Italy’s Sanpaolo IMI for $1.6 billion in what had been Egypt’s biggest ever auction of state assets. It gave birth to its largest private banking group and signaled continuing foreign interest in the privatization program.
That saw 190 state-run companies and facilities sold off from the early 1990’s until 1997. Last year’s appointment of Moheiddin, a reform-minded technocrat to the new post of Investment Minister had been seen as a sign that more sell-offs might be on the way.
Both the IMF and the World Bank have repeatedly urged Egypt – the most populous country in the Arab world and a key Western ally – to remove obstacles to the development of the private sector which they claim has a vital role to play in reducing poverty by expanding the economy.
The Italian banking giant revealed that it had outbid four European and Arab competitors in a battle in which the stakes proved much higher than originally predicted. “Nobody expected such a price. It is a very good price, said an official from France’s BNP-Paribas, one of the four other contenders. “It also confirmed that there is a very high interest in Egypt from foreign investors right now.
Egypt is the fourth-largest economy in the Arab world but only around 10 percent of its 73 million inhabitants have bank accounts.