Egypt’s Finance Minister Mohamed Maait said his country is preparing to issue its first sovereign Sukuk (Islamic bonds) based on exclusively state-own assets.
In a statement published on the government’s official Facebook page on Tuesday, Maait said the state-ownership policy document includes a national strategy to empower the private sector and deepen its participation in economic activity.
It also aims to reassure local and foreign investors, and boost the confidence of international institutions in Egypt’s economy in a way that helps maintain the state’s safe economic path.
During his meeting on Monday with a delegation from the First Abu Dhabi Bank, Maait pointed out that the successive global economic crises have doubled the importance of alternative financing by bolstering efforts to diversify financing tools, and reducing the cost of development investments.
He said Egypt’s preparations to issue its first sovereign Sukuk will contribute to expanding the investor base by attracting a new segment of Arab and foreign investors, especially from the Middle East, North Africa and Asia, who prefer their financial transactions to be held in compliance with the principles of Islamic Sharia.
This would eventually allow Egypt to provide the necessary financing for the investment projects that are included in its state budget’s economic and social development plan.
Maait said the Prime Minister made directives determining the fixed and mobile state-owned assets, based on which the Sukuk will be issued.
This will enable relevant authorities to draw a mechanism for evaluating the right to exploit or rent these assets, provided that the period doesn’t exceed 30 years as per the constitution. These assets may be leased back to the issuer of their Sukuk.