DUBAI: Egypt expects to earn at least LE 30 billion ($5.25 billion) in the next two fiscal years from the sale of state assets, about 50 percent more than in the last two years, the investment minister said on Monday. Egypt should conclude up to 30 privatization transactions by July 2007, including the sale of an 80 percent stake in state-owned Bank of Alexandria, Mahmoud Mohieldin said to reporters in Dubai. Italian bank Sanpaolo IMI took over Bank of Alexandria in October for $1.61 billion, turning it into the country s largest private-sector bank. We are finalizing deals in mid-sized entities that should bring in 15 billion Egyptian pounds this fiscal year, Mohieldin told Reuters on the sidelines of a conference. The government has forecast a budget deficit for the year ending June 30 of about 8 percent of gross domestic product. State asset sales account for the bulk of the foreign direct investment in Egypt, the most populous Arab country. FDI reached $6 billion in the last fiscal year and Mohieldin expects that will rise to $7.5-$8 billion in the current fiscal year. Forty percent of the investment will come from Gulf Arab states, where companies, riding economic growth driven by a tripling of oil prices since 2001, are scouring the region for investments opportunities. Dubai-based Emaar Properties bought a strip of prime tourism real estate on Egypt s Mediterranean coast for $175 million in August, less than a month after Abu Dhabi-based Emirates Telecommunications Corp. led a consortium that paid $2.9 billion for Egypt s third mobile phone license. The economic activity outside of the oil sector is behind the growth in FDI, Mohieldin said. In the year to June, 2006, the oil sector accounted for 30 percent of FDI, down from 66 percent in the previous year, he said. The government expects to make LE 15-LE 18 billion from asset sales in the year ending June, 2008, Mohieldin said, adding that insurance companies, container handling companies and textiles firms were earmarked for privatization. In the two years ending June 30, 2006, Egypt earned 20.6 billion pounds from the sale of state assets, Mohieldin said.
Reuters
