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Wednesday, 24 June 2020

Egypt to streamline public sector in FY2020-2021, cut 25% of state-owned enterprises

Gov’t to streamline public sector in FY2020-2021, cut 25% of state-owned enterprises: The government is planning to reduce the number of state-owned enterprises (SOEs) to 90 from 119 in FY2020-2021 through mergers or liquidations as it looks to streamline the sector, Youm7 reports, quoting unnamed sources with ties to the Public Enterprises Ministry. At least four SOEs have already been merged and procedures are ongoing for more, the sources say.

Textiles, construction sectors are at the forefront: Look for plenty of action coming out of the Cotton and Textile Industries Holding Company, with 32 companies planned to be reduced to just 10. A handful operating in the real estate and construction sectors will also be assimilated into others.

Background: In-the-works amendments to the Public Enterprises Act are expected to put in place regulations to streamline financial performance in SOEs, many of whom make bns of losses every year. Under those regulations, SOEs unable to turn profits will be forced into liquidation or be merged with another public entity. The legislative changes come as part of a rescue plan for loss-making SOEs announced by minister Hisham Tawfik when he was sworn in 2018. The plan has seen the ministry undertake feasibility studies to determine each company’s financial viability to shut down those found incapable of making a turnaround.

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