What is the new law to oversee state-owned enterprises?

In a significant move to enhance the management and efficiency of state-owned enterprises, the Egyptian Cabinet has approved a new draft law designed to regulate the ownership and operation of companies fully owned by the state. This decision aims to align with the state’s broader economic objectives and governance standards.

Key provisions of the new law

The draft law encompasses various provisions that apply to companies wholly owned by the state’s administrative units or public legal entities. It also covers companies partially owned by state units, aiming to create a cohesive regulatory framework across all state-owned enterprises.

Objectives and focus areas

The primary goal of the new legislation is to bolster governance in economic activities and ensure investments are directed towards critical public sectors. By enhancing the governance structure, the law seeks to attract both domestic and foreign investments, promote fair competition, and establish equitable market practices. These measures are expected to optimize the performance and maximize the investments of state-owned companies.

Establishment of the state-owned companies inventory and follow-up unit

To oversee the implementation of this law, the Cabinet has approved the formation of the State-Owned Companies Inventory and Follow-up Unit. This new entity will be led by a CEO with expertise in investment and project management, supported by a team of specialists. The unit will be responsible for developing regulatory programs for state-owned enterprises, ensuring they meet specified timelines and targets, and monitoring their adherence to the broader policy framework.

Encouraging private sector participation

The unit will also play a crucial role in fostering private sector involvement in economic activities. It will propose legal frameworks and policies that align with international governance standards, thereby creating an environment conducive to private investment.

Database and market expansion

One of the unit’s key tasks will be maintaining a comprehensive database of state-owned companies. This database will help identify potential candidates for divestment or capital expansion, and oversee mergers or acquisitions aimed at enhancing market capitalization. By keeping a detailed inventory, the unit aims to streamline the management and performance evaluation of these enterprises.

Impact on the economy

The approval of this draft law represents a strategic effort by the Egyptian government to modernize and improve the management of its state-owned enterprises. By focusing on governance, investment, and market practices, the law aims to create a more competitive and efficient economic environment. This move is expected to attract significant domestic and foreign investments, further integrating Egypt into the global economy.

Overall, this legislation marks a pivotal step in Egypt’s ongoing efforts to enhance economic governance, stimulate growth, and ensure the effective utilization of state-owned resources. The establishment of the State-Owned Companies Inventory and Follow-up Unit will be crucial in driving these objectives forward, ensuring that state-owned enterprises contribute positively to the country’s economic landscape.