By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
DailynewsegyptDailynewsegypt
  • Home
  • Business
    BusinessShow More
    Egypt to issue new bonds for climate, social goals
    Egypt to issue new bonds for climate, social goals
    September 27, 2023
    Saudi Public Investment Fund eyes stake in Palm Hills Development
    Saudi Public Investment Fund eyes stake in Palm Hills Development
    September 27, 2023
    UNDP, MBRF launch online learning initiative for Arab countries
    UNDP, MBRF launch online learning initiative for Arab countries
    September 27, 2023
    Egypt Post invests in Roaderz platform to enhance e-commerce, delivery services
    Egypt Post invests in Roaderz platform to enhance e-commerce, delivery services
    September 27, 2023
    GAFI to grant 45 more golden licences to boost investment
    GAFI to grant 45 more golden licences to boost investment
    September 27, 2023
  • Politics
    PoliticsShow More
    Egypt’s Irrigation Minister highlights climate challenges for water sector
    Egypt’s Irrigation Minister highlights climate challenges for water sector
    September 27, 2023
    CCCPA, Senghor University join forces for African peace, development
    CCCPA, Senghor University join forces for African peace, development
    September 27, 2023
    Arab League chief urges more funding, investment for food security
    Arab League chief urges more funding, investment for food security
    September 27, 2023
    Egypt denounces Houthi attack on Bahraini forces in Saudi Arabia
    Egypt denounces Houthi attack on Bahraini forces in Saudi Arabia
    September 27, 2023
    vPalestine urges international action to end Israeli occupation, crimes
    Palestine urges international action to end Israeli occupation, crimes
    September 26, 2023
  • Interviews
    InterviewsShow More
    Microsoft Egypt aims to provide advanced AI models, build solid AI ecosystem: Mirna Arif
    Microsoft Egypt aims to provide advanced AI models, build solid AI ecosystem: Mirna Arif
    September 18, 2023
    I love privacy, and I am not concerned about competition: Yasmine Sabry
    I love privacy, and I am not concerned about competition: Yasmine Sabry
    September 14, 2023
    Sustainability, digital transformation at the heart of our strategy: Heidelberg Materials Egypt
    Sustainability, digital transformation at the heart of our strategy: Heidelberg Materials Egypt
    September 12, 2023
    India welcomes Egypt's BRICS membership: Boosting trade, investment, and access to strategic commodities
    India welcomes Egypt’s BRICS membership: Boosting trade, investment, and access to strategic commodities
    September 11, 2023
    The box office is not a measure of success: Basma Hassan
    The box office is not a measure of success: Basma
    September 6, 2023
  • Culture
  • Opinion
  • Sports
  • Lifestyle
Reading: Journey of Egypt’s first sovereign fund
Share
Notification
Latest News
Genetically engineering associations between plants and nitrogen-fixing microbes could lessen dependence on synthetic fertilizer
Genetically engineering associations between plants and nitrogen-fixing microbes could lessen dependence on synthetic fertilizer
Science
Earthworms contribute to 6.5% of global grain production, says new research
Earthworms contribute to 6.5% of global grain production, says new research
Science
Researchers build and test a framework for achieving climate resilience across diverse fisheries
Researchers build and test a framework for achieving climate resilience across diverse fisheries
Science
Egypt to issue new bonds for climate, social goals
Egypt to issue new bonds for climate, social goals
Business
Saudi Public Investment Fund eyes stake in Palm Hills Development
Saudi Public Investment Fund eyes stake in Palm Hills Development
Business
Aa
Aa
DailynewsegyptDailynewsegypt
  • Home
  • Business
  • Politics
  • Interviews
  • Culture
  • Opinion
  • Sports
  • Lifestyle
  • Home
  • Business
  • Politics
  • Interviews
  • Culture
  • Opinion
  • Sports
  • Lifestyle
Have an existing account? Sign In
Follow US
  • Advertise
© 2023 DNE News. All Rights Reserved.
Dailynewsegypt > Blog > Business > Journey of Egypt’s first sovereign fund
Business

Journey of Egypt’s first sovereign fund

Daily News Egypt
Last updated: 2019/01/30 at 10:41 PM
By Daily News Egypt 5 Min Read
Share
the Ministry of Planning, Monitoring, and Administrative Reform, Hala El-Said (DNE Photo)
SHARE

In April 2018 President Abdel Fattah Al-Sisi instructed all concerned bodies to establish the first sovereign and wealth fund. The deed was followed by another through endorsing Egypt’s sovereign Wealth Draft Law in July by parliament. In the aftermath, the ministry of planning published an announcement in an international publication in September seeking candidates to hold a position of executive director in the new entity. The qualified candidate will be revealed during the first quarter of 2019 according to the Minister of Planning, Monitoring, and Administrative Reform Hala Al Said. Then, President Al-Sisi issued an order in November to finalise all required measures to create a new fund in the name of ‘Misr Fund’, consistent with global standards in this regard.

With an authorised capital of EGP 200bn and a paid-in capital of EGP 5bn, the anticipated fund will run all state assets, including untapped ones, in order to maximise their use, and enhance the investment sector. The fund is one of Egypt Vision 2030’s outcomes, the government’s sustainable development strategy which is expected to operate 3,000 assets in a profitable and economic way, to achieve the goals of Egypt Vision 2030.

According to a report issued by the American Chamber of Commerce in Egypt, despite the fact that sovereign wealth funds are common in MENA countries, especially among the Gulf Cooperation Council countries, it is distinctly Egypt’s first experience in this field.

The report, also referred to Saudi Arabia’s experience in this field as a neighbour country. Saudi Arabia stands out as a regional leader when it comes to operating several sovereign wealth funds. The Sovereign Wealth Fund Institute (SWFI) estimates the combined assets of all funds worldwide at $7.58tn at the end of 2017, with the kingdom accounting for 9.5% in total.

The Saudi Arabian Monetary Agency (SAMA), was launched in 1952 and is supported by significant foreign currency reserves, which allow it to retain its position as the world’s fifth largest sovereign fund in the 2017 ranking, with a net worth of $494bn, according to the SWFI.  Following the same trajectory is the Riyadh-based Public Investment Fund (PIF), established in 1971, it ranked as the 11th, with assets estimated at $223.9bn and accounting for 70% of the Middle East sovereign fund investment in 2017.

The PIF seeks to invest through equity, loans, or guarantees. In addition, it allocates public funds to significant strategic projects that cannot be implemented by the private sector alone due to insufficient experience or capital.

In an effort to position the fund among the world’s largest, the Saudi Kingdom launched the PIF programme (2018-2020) in October as one of 12 programmes under the Saudi Vision 2030. The PIF’s programme plans to increase its total assets to $400bn by the end of 2020.

Saudi Arabia went through a boom-and-bust cycle as oil revenues fell from SR 368bn in 1981 to SR 74bn in 1986, causing huge drops in the fund’s reserves and negatively affecting the standard of living, according to a 2009 study titled “Rentier Exceptionalism, Oil and Political Mobilisation in Saudi Arabia.” A rentier state is one that derives all or a substantial portion of national revenues from indigenous resources.

Another challenge occurred in 1998, when Brent crude stood at $13 a barrel in real terms, with a break-even price for Saudi Arabia of $20.4. SAMA’s foreign assets were a mere $46.9bn, with government debt as a percentage of the GDP at 102.2%, according to the International Investor.

Brent prices began to rise two years later, hitting $28.6 a barrel. By 2013, Brent prices were $108.8 a barrel and Saudi Arabia’s break-even point was $92.8. SAMA’s foreign assets totalled $725.7bn, and government debt as a percentage of the GDP was 2.2%. 

What differentiates Egypt from Saudi Arabia in this regard is that Egypt’s new sovereign fund will generate wealth from tapping public properties and assets. In addition, while Saudi funds depend on petroleum, Egypt’s approach to securing capital will be more diverse, including trade surpluses generated by energy projects and investments and other megaprojects which have been established during the last few years.

Nevertheless, the hope is that the new sovereign wealth fund will support sustainable economic development as outlined in Egypt Vision 2030, the report expected.

You Might Also Like

Egypt to issue new bonds for climate, social goals

Saudi Public Investment Fund eyes stake in Palm Hills Development

UNDP, MBRF launch online learning initiative for Arab countries

Egypt Post invests in Roaderz platform to enhance e-commerce, delivery services

GAFI to grant 45 more golden licences to boost investment

TAGGED: Hala Al-Said, saudi arabia, sovereign fund
Share this Article
Facebook Twitter Email Print
Previous Article Egypt’s SWF key issue since 2015; will be applied in Q1 of 2019
Next Article ‘Women of Egypt’ announces launch of its first writing contest for Egyptian children
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Ad image
Ad image

Stay Connected

Facebook Like
Twitter Follow
Instagram Follow
Youtube Subscribe

Latest News

Genetically engineering associations between plants and nitrogen-fixing microbes could lessen dependence on synthetic fertilizer
Genetically engineering associations between plants and nitrogen-fixing microbes could lessen dependence on synthetic fertilizer
Science
Earthworms contribute to 6.5% of global grain production, says new research
Earthworms contribute to 6.5% of global grain production, says new research
Science
Researchers build and test a framework for achieving climate resilience across diverse fisheries
Researchers build and test a framework for achieving climate resilience across diverse fisheries
Science
Egypt to issue new bonds for climate, social goals
Egypt to issue new bonds for climate, social goals
Business
//
Egypt’s only independent daily newspaper in English. Discuss the country’s latest with the paper’s reporters, editors, and other readers.

Quick Link

  • Home
  • Business
  • Politics
  • Interviews
  • Culture
  • Opinion
  • Sports
  • Lifestyle

Sign Up for Our Newsletter

Subscribe to our newsletter to get our newest articles instantly!

© 2023 DNE News. All Rights Reserved.

Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc..

Zero spam, Unsubscribe at any time.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?