Minister of Finance Mohamed Maait said that the economic recovery plan that was initiated by the government in implementation of President Abdel Fattah Al-Sisi’s directives made the Egyptian economy more able to flexibly deal with the current global challenges according to a balanced proactive approach to risk management.
He pointed out that the state ownership policy document includes a national strategy to empower the private sector and deepen its participation in economic activity. It also sends a message of reassurance to local and foreign investors, enhancing the confidence of international institutions in the Egyptian economy in a way that helps maintain the state’s safe economic path.
Maait added — in his meeting with the First Abu Dhabi Bank delegation — that the recent successive global economic crises doubled the importance of alternative financing, with the state exerting efforts to move towards diversifying its financing tools.
This will lead to reducing the cost of development investments, as preparations are made to issue the first sovereign sukuk offering. This will also contribute to expanding the investor base by attracting a new segment of Arab and foreign investors, especially from the Middle East, North Africa (MENA), and Asia.
These Islamic Sharia-friendly financial transactions will lead to providing the necessary funding for investment projects listed in the economic and social development plan in the state’s general budget.
The minister indicated that the issuance of sukuk will be on the basis of assets that will be privately owned by the state by selling the usufruct of these assets and the right to lease them, or through any other method consistent with the contract of issuance of these sukuk in accordance with the principles of Islamic Sharia.
He added that a decision was issued by Prime Minister Mostafa Madbouly to specify the fixed and movable assets owned by the state as private property on the basis of which sukuk are issued, so that there is a mechanism for evaluating the right to use these assets or, in return, for leasing them for this purpose. The maximum period for determining the right to use these assets or the period of leasing them is 30 years as a commitment, in accordance with the provisions of the constitution.
Furthermore, the minister explained that Egypt is leading the transition to a green economy in MENA, as it did in issuing the first sovereign green bond offering at a value of $750m in September 2020, which contributed to attracting new investors.
The government seeks to increase the percentage of environmentally friendly projects in its new budget to 50% of public investments and allocate EGP 2bn to support the transition to environmentally friendly projects.
He pointed out that the ongoing preparations to host the UN Conference of Parties on Climate Change (COP 27) in Sharm El-Sheikh this November confirm once more the state’s keenness to encourage sustainable clean investment and the transition to a green economy through environmentally friendly projects.