Egypt's Sovereign Wealth Fund Chief Resigns Amid Slow Privatization Progress

Ayman Soliman, the chief executive of Egypt's $12 billion sovereign wealth fund, has stepped down from his position, according to three sources familiar with the matter. This development comes after five years of limited progress in the country's privatization initiatives, which were announced at the beginning of Soliman's tenure in 2019.

The Sovereign Fund of Egypt (TSFE), established in 2018, was created to promote private sector partnerships and facilitate foreign investment in state-owned enterprises. However, the government and military have shown reluctance to relinquish control over certain assets, impeding the fund's objectives.

Soliman's departure is part of a broader reshuffle aimed at presenting a fresh image for Egypt's economic leadership. A government source, speaking on condition of anonymity, stated, "Egypt wanted to present a fresh image, and that meant Soliman had to step down."

In 2019, Soliman outlined an ambitious vision for TSFE, aiming to "unlock value and create wealth." A key component of this plan involved selling stakes in public projects and state-owned companies, including shares in two military-owned enterprises and a stake in a 25-year-old power plant concession. However, progress on these deals has been slow, with many still pending completion.

Egypt's privatization efforts date back to the 1990s, but the country has faced ongoing economic challenges. As the second-largest economy in Africa, with a GDP estimated at $435.62 billion in 2022, Egypt has been implementing economic reforms since 2016 to attract foreign investment and diversify its economy beyond traditional sectors.

The International Monetary Fund (IMF), which has been providing financial support to Egypt since 2016, recently completed its third review of an extended $8 billion loan agreement with the country. The IMF emphasized the need for greater efforts in accelerating the divestment program and creating a level playing field for private firms, addressing concerns about uncompetitive practices by state-owned enterprises.

Egypt's economy relies heavily on key sectors such as tourism and revenue from the Suez Canal. However, the country has faced significant economic challenges, including high inflation and public debt. The Egyptian pound has experienced substantial devaluation in recent years, further complicating the economic landscape.

"Greater efforts are needed in accelerating the divestment programme and levelling the playing field for private firms, avoiding uncompetitive practices by state-owned enterprises."

As Egypt continues to navigate its economic challenges, the resignation of Ayman Soliman marks a significant shift in the leadership of the country's sovereign wealth fund. The coming months will be crucial in determining whether this change will lead to accelerated progress in privatization efforts and increased foreign investment in the Egyptian economy.