Egypt eyes 65% private sector contribution by 2025/2026 amid privatization push

Egypt’s third progress report on the State Ownership Policy Document highlighted a major leap in the government’s privatization efforts, largely driven by the landmark Ras El Hekma agreement with Abu Dhabi–based ADQ. The report showed that once the deal was included, the program’s completion rate surged to 244.8 percent of its target, signaling that the initiative has exceeded its goals for attracting foreign direct investment.

From March 2022 to June 2025, proceeds reached $5.86 billion. Without the Ras El Hekma transaction, however, the achievement rate stood at just 48 percent of the $12.2 billion target, underscoring the deal’s central role in accelerating progress.

The State Ownership Policy aims to raise the private sector’s share of the economy to 65 percent by fiscal year 2025/2026. To support this, the government expanded its divestment list to 35 companies, adding Eastern Company, Ezz Dekheila Steel, and Telecom Egypt. A centralized privatization unit under the Cabinet was established to manage implementation, select investment banks and legal advisors, and design marketing strategies. In June 2023, the International Finance Corporation was brought in to provide technical support and help craft a comprehensive execution strategy.

The program spans four phases. The first two were almost fully achieved, generating more than $5 billion through divestments that included deals with ADQ, Saudi Arabia’s Public Investment Fund, and sales of stakes in companies such as Pachin, Ezz Dekheila Steel, Ethydco, and Elab. The third phase, which was the most ambitious with a $5 billion target covering strategic assets like the Gabal El Zeit wind farm and the Damietta and Port Said container terminals, raised just $625 million due to global market volatility and foreign exchange pressures. The current fourth phase, scheduled to run until June 2025, targets $1.9 billion from sectors including energy, food, pharmaceuticals, and logistics. So far, $142 million has been raised, with more transactions expected in the first half of 2025.

Beyond revenues, the program has deepened Egypt’s capital market. Average market capitalization reached 1.95 trillion Egyptian pounds in 2023 and 2024, compared to 662.7 billion pounds over the previous decade. As a share of GDP, capitalization climbed to 16.3 percent from 12.3 percent in 2022, nearing historic highs.

The government reaffirmed its commitment to completing the program as a central pillar of economic reform, with ambitions to raise total investment rates to between 25 and 30 percent and achieve GDP growth of 7 to 9 percent in the medium term. Future privatizations will prioritize high-potential sectors such as renewable energy, logistics, food industries, and financial technology. Investor appetite remains strong, as evidenced by the United Bank offering, which was oversubscribed 59 times.