Members of parliament’s planning and budget committee have demanded that the government share its plan to offer shares of state-owned companies on the Egyptian Exchange (EGX), including the number of companies being listed, the timing of offering them, and the shares to be launched.
Mohamed Fouad, a member of the committee, said that the government must let go of its fears regarding what happened with the privatisation programme in the era of former prime minister Atef Ebid through launching governing shares in the ownership of state companies, without repeating the process of offering minority shares, as was the case with Telecom Egypt.
Fouad said he expects the initial public offering (IPO) programme planned to be launched by the government to take three years in order to become successful and attractive to local and foreign capital.
The head of parliament’s economic committee, Amr Ghallab, said in a previous statement to Daily News Egypt that his committee will discuss with the government raising the offered shares of companies that the government plans to list on the EGX over the upcoming period.
A member of the planning and budget committee, who spoke on the condition of anonymity, said that a portion of the returns from the offerings will go to the state’s general budget in order to fund the deficit.
“The financial statement of the Finance Ministry shows that the return will bridge the budget deficit rather than develop companies and increase production—something that the parliament is afraid of,” he added.
The Ministry of Finance targets a total deficit of 8.4% next fiscal year, and a growth rate nearing 6%.
Miniser of Finance Amr El-Garhy said that there are four state-owned companies that will be offered in 2018.
He added during a meeting with the planning and budget committee that the government will offer shares ranging from 15-30% of 23 companies over two years.
Fouad said that his committee demanded the minister of finance reform the tax system and improve its efficiency, increasing tax returns to 15% of GDP next fiscal year.
The financial statement of the Ministry of Finance show that the ministry targets EGP 770bn in tax returns next fiscal year, compared to EGP 603bn this fiscal year.
“The finance minister has not provided any explanations on fixing the price of petroleum in the draft budget for next fiscal year at $67 in light of the changes in the global market,” Fouad added.
The financial statement issued by the Finance Ministry said that each increase of $1 in the price of Brent crude costs the state treasury about EGP 4bn.