Public Enterprises Minister defends privatization plans + more overpopulation talk in the House: Public Enterprises Minister Mahmoud Esmat was in the hot seat in the House of Representatives yesterday, defending the liquidation of some unprofitable publicly owned companies — a long-running point of contention between the government and some opposition MPs. The House Health Committee also met to discuss the country’s rising population.

State-owned companies need private money to turn them around, MPs said. “The problem with public enterprise companies is that they need huge investments to get out of their chronic financial, technical and management problems,” Esmat said. Many state-owned companies are overstaffed, have dilapidated machinery, high debt levels, and lack of working capital, he said. Public firms in the pharma, automotive, fertilizers, and petrochem industries need “huge investments … to be upgraded and streamlined,” a problem that the new state ownership policy attempts to address by attracting fresh investment from the private sector, he said.

MPs point to two cases where they think fresh investment will make a difference: El Mahalla Spinning and Weaving Company will hit its full production capacity in the second half of 2023 after some EUR 540 mn was invested to upgrade its operations. “We are also working hard to put the Talkha fertilizers company in operation after a two-year suspension and in partnership with the private sector,” Esmat said.

OUR QUESTION- What do you do with chronic lossmakers in which no private investor will ever take a stake?

Most MPs are fine with partial privatization — but some still can’t stomach liquidation of loss-making state firms: There is “agreement among MPs” that the ministry should stop closing and liquidating state-owned firms, said Rep. Moataz Mahmoud, who heads the House Industrial committee. “We support that these companies reach partnerships with the private sector as a new policy for upgrading performance and injecting investments,” he said. “But at the same time we reject the ministry resorting to the option of liquidating or closing any of the affiliated companies.”

OUR TAKE- If it cannot find a willing private-sector buyer, the Madbouly government needs to hold the line and close down moribund companies that continually deliver losses. Yes, that will mean the loss of jobs — but reskilling programs for those unable to find new work are a vastly better investment of public funds than Nasserist corporate welfare.

Some opposition MPs have long signaled dissatisfaction with the Public Enterprise Ministry for liquidating loss-making companies. They were hoping for a change of heart on the liquidation of financially moribund El Nasr Coke and Chemicals after Mahmoud Esmat last August took the reins of the ministry from Hisham Tawfik, who had been repeatedly criticized over his stance on privatization and liquidation as he worked to streamline the ministry’s portfolio.

MEANWHILE- MPs also called for more clarity on the state ownership policy, which lays out the government’s privatization roadmap.

HOUSE HEALTH COMMITTEE TALKS OVERPOPULATION-

Legislation is not the solution to overpopulation: It would be “quite difficult” to pass laws in Egypt aimed at curbing population as seen in countries including China, Singapore and Vietnam, National Population Council head Tarek Tawfik told the House Health Committee yesterday. Our population is expected to reach 157 mn people in 2050 and 205 mn by 2100, he added.

REMEMBER- The government is reportedly looking at introducing incentives for families who commit to having no more than two children in a bid to control a population surge. Egypt’s population has now surpassed 104.4 mn, increasing by 1.6 mn in 2022 alone, according to data by official statistics agency CAPMAS.

FAST FACT- We’re one among the eight nations that will deliver more than half of world’s projected increase in population through 2050, according to UN forecasts released last year.