Egypt to list armed forces companies to boost economic growth

In a significant step toward economic reform, Egypt is set to list 3 to 4 companies affiliated with the Armed Forces on the Egyptian Stock Exchange (EGX). This move is part of a broader IPO program designed to attract private sector investment, promote transparency, and strengthen the role of the private sector in the national economy.

A new chapter in economic governance

Prime Minister Mostafa Madbouly’s announcement reflects the government’s commitment to transforming state-owned enterprises into competitive market players. By listing companies managed by the Armed Forces, Egypt aims to:

• Increase private sector participation in key industries.
• Enhance governance and transparency in the management of these companies.
• Improve efficiency and competitiveness on both local and global scales.

This initiative marks a milestone in the government's long-standing plan to open up the economy and foster trust among domestic and international investors.

The scope of the IPO program

The IPO program encompasses a wide range of sectors, including energy, pharmaceuticals, transportation, telecommunications, and industrial manufacturing. With the aim of raising $6.5 billion by the end of 2024, the government plans to offer stakes in 32 state-owned companies by the first quarter of the year.

This ambitious plan is expected to:

• Revitalize the Egyptian stock market.
• Boost capital market liquidity.
• Attract foreign direct investment.

The role of armed forces companies

The inclusion of Armed Forces-affiliated companies in the IPO program is particularly noteworthy. These companies, which have long been key players in Egypt’s economy, are now being positioned for greater private sector involvement. This step aligns with President Abdel-Fattah El-Sisi’s 2019 vision of bringing military-run enterprises into the public stock market to promote transparency and integrate them more fully into the economy.

IMF recommendations and economic reforms

The decision comes amid recommendations from the International Monetary Fund (IMF), which has emphasized the need for accelerated privatization as part of Egypt’s $8 billion Extended Fund Facility program. This move signals Egypt’s commitment to addressing IMF directives while implementing structural reforms to enhance economic resilience.

Why this matters: a gateway to investment opportunities

The listing of Armed Forces companies offers unique opportunities for investors. These companies bring:

• Established Market Presence: Strong operational track records in critical industries.
• Potential for Growth: Increased efficiency and competitiveness under public oversight.
• Transparency and Governance: New levels of accountability, appealing to institutional and individual investors alike.

Moreover, the broader IPO program diversifies investment options and strengthens Egypt’s position as a regional economic hub.

Conclusion

Egypt’s decision to list Armed Forces-affiliated companies represents a bold step toward economic transformation. By increasing transparency, fostering private sector involvement, and adhering to international best practices, the government is paving the way for a more competitive and inclusive economy. For investors, this initiative opens doors to new opportunities in one of the region’s most dynamic markets.