Egypt approves policy to limit state's businesses, boost private sector's role

Egyptian President Abdel-Fattah al-Sisi approved a state ownership policy that defines the government's economic presence with an aim to increase the private sector's role in the economy, the cabinet said in a statement on Thursday.

The president's approval of the State Ownership Policy Document "confirms the state's keenness to allow more room for the private sector to participate in generating economic growth," Prime Minister Mostafa Madbouly was quoted as saying at the cabinet meeting.

The move is among the key demands of the International Monetary Fund (IMF), which has recently approved a loan of 3 billion U.S. dollars to Egypt to support the Arab country's economic and structural reforms.

The IMF's support package includes measures to be implemented by Egypt to "reduce the state's footprint" and "facilitate private-sector-led growth," in addition to adopting a permanent shift to a durable exchange rate regime.

Madbouly said that the new policy seeks to implement the state's gradual exit from some economic activities to allow the private sector to increase its presence in those sectors.

He added that the approved document mainly aims to raise the investment rate to 25-30 percent, thus contributing to boosting the economic growth rate to 7-9 percent.

Egypt has been facing increasing inflation in the past year, driven by rising food and energy prices. The country's annual urban consumer inflation rate surged to 18.7 percent in November, marking the highest in nearly five years.