CAIRO — Egypt’s forthcoming update to its State Ownership Policy Document is expected to reignite debate over how the country values strategic state assets, a question that could influence billions of dollars of future privatizations, public offerings and foreign investment transactions.
According to recent media reports, the State Ownership Unit has completed revisions to the document, while IMF Communications Director Julie Kozack recently confirmed that the Egyptian government intends to publish an updated version in the near term. The framework is expected to provide a clearer roadmap for the state’s role across various sectors of the economy and identify areas where private-sector participation can be expanded.
While public attention has largely focused on which sectors the government may gradually exit, economists, investors and financial advisers argue that a more consequential question concerns how state assets will be valued as Egypt prepares the next phase of its reform programme.
Beyond Asset Sales
The original State Ownership Policy, launched in 2022, was designed to clarify the state’s economic role and support reforms aimed at increasing private-sector participation. Since then, Egypt has pursued a series of asset sales, public offerings and investment partnerships across sectors including banking, hospitality, logistics, energy and manufacturing.
The updated document is expected to provide greater clarity regarding the state’s future participation in strategic industries while supporting commitments made under Egypt’s IMF-backed reform programme.
For investors, however, the issue increasingly extends beyond whether assets are sold to whether they are valued according to their long-term economic potential.
The Valuation Debate
The discussion intensified following major currency adjustments over the past decade, particularly after the 2016 flotation of the Egyptian pound and subsequent exchange-rate reforms between 2022 and 2024. Those shifts significantly altered the dollar-equivalent value of many domestic assets and prompted renewed debate over how strategic national assets should be assessed during periods of currency volatility.
Economists, investment bankers and market participants increasingly argue that the central issue is not whether assets should be valued in Egyptian pounds or U.S. dollars, but whether valuation methodologies accurately capture their future earning potential.
Assets generating export revenues, foreign-currency earnings or strategic infrastructure services may require methodologies that incorporate future cash flows, replacement costs and international benchmarks rather than relying primarily on historical accounting values recorded in local currency.
Valuation in Pounds or Dollars?
One of the central questions emerging from the debate is whether strategic state assets should be evaluated primarily through local-currency metrics or according to their international earning potential. While Egyptian assets are legally valued in Egyptian pounds, foreign investors typically assess opportunities in U.S. dollars using internationally recognized valuation models.
As a result, economists and investment advisers increasingly argue that assets generating hard-currency revenues should be evaluated according to future cash flows, export earnings and international benchmarks rather than solely through local-currency book values.
A port operator serving international shipping lines, for example, may continue generating substantial dollar-linked revenues regardless of exchange-rate fluctuations. Under such circumstances, analysts argue that relying exclusively on local-currency accounting metrics may fail to capture the asset’s long-term economic value.
Similarly, export-oriented industries, tourism assets and energy projects often derive a significant share of their revenues from foreign markets or hard-currency sources, making international valuation benchmarks increasingly relevant when assessing strategic assets.
Economists Call for Modern Valuation Standards
The debate has gained further momentum as policymakers prepare the updated framework.
Economist Hany Genena, Head of Research at Pharos Al Ahly, argued in comments published by Al-Ahram Weekly in September 2025 that many Egyptian assets remain undervalued relative to comparable regional markets. Genena cited the example of Orascom Construction, which achieved a valuation on the Abu Dhabi Securities Exchange significantly higher than that reflected in the Egyptian market. He also emphasized the importance of providing investors with revenue visibility through mechanisms such as long-term supply and off-take agreements that support future cash-flow generation.
Separately, Fakhry El-Feky, Chairman of Parliament’s Budget Committee and a former IMF adviser, warned in an interview with Agenzia Nova that exchange-rate depreciation alone does not necessarily create economic value or improve productive capacity. El-Feky argued that excessive currency weakness could generate inflationary pressures without delivering the expected gains in competitiveness, underscoring the importance of evaluating assets according to their economic fundamentals rather than short-term currency movements.
Together, these perspectives reinforce a growing view among market participants that strategic assets should be assessed according to their ability to generate future earnings and support economic activity rather than through historical accounting measures alone.
Valuation Lessons from Previous Sales
The debate is not merely theoretical. Recent transactions have highlighted the challenge of reconciling government valuation expectations with investor perceptions of risk, currency exposure and future earnings potential.
The public listing of United Bank, which followed unsuccessful attempts to attract a strategic investor, illustrated how market conditions can influence both pricing and transaction structure. Likewise, discussions surrounding the proposed offerings of military-affiliated assets such as Safi and Wataneya have frequently centred on valuation expectations, future growth prospects and the extent to which investors are willing to pay for long-term strategic opportunities.
Market participants argue that narrowing the valuation gap between sellers and investors will be critical if Egypt is to accelerate future transactions under the updated State Ownership Policy framework.
International Standards Gain Ground
Investment professionals note that major international transactions are rarely based solely on book value. Instead, investors typically employ a combination of discounted cash-flow analysis, replacement-cost assessments, comparable international transactions and sector-specific earnings benchmarks.
For infrastructure assets in particular, replacement cost can significantly alter perceptions of value. Ports, airports, industrial zones and energy facilities often require billions of dollars and years of development to replicate, suggesting that historical accounting figures may fail to capture their strategic significance.
Likewise, export-oriented companies and businesses generating hard-currency revenues are frequently assessed using enterprise-value multiples and international benchmarks comparable to regional peers across the Gulf, Türkiye and emerging markets.
This approach has become increasingly relevant as Egypt seeks to position itself as a regional logistics, manufacturing and energy hub serving markets across Africa, Europe and the Middle East.
Maximizing Value, Not Just Selling Assets
Government officials have repeatedly stressed that the objective of the State Ownership Policy is not merely to reduce the state’s presence in selected sectors, but to attract strategic investors capable of contributing capital, technology, management expertise and export growth.
The updated document is therefore expected to serve not only as a roadmap for future divestments but also as a framework governing how those transactions are structured, marketed, and valued.
For investors, sovereign wealth funds, and international financial institutions, the credibility of the policy will depend as much on valuation principles as on the list of sectors targeted for private-sector participation.
A Test of Reform Credibility
Many investors argue that a valuation framework incorporating hard-currency earnings, replacement costs, export potential and international benchmarks would help narrow valuation gaps between buyers and sellers, improve transparency, and enhance investor confidence.
More broadly, such an approach would signal a shift toward internationally recognized asset-pricing methodologies at a time when Egypt is competing aggressively for global capital and seeking to unlock greater private-sector participation in economic growth.
As the government prepares to unveil the updated document, investors will be watching closely to determine whether the next phase of Egypt’s reform agenda focuses not only on reducing the state’s footprint in the economy, but also on ensuring that strategic national assets are valued according to their long-term economic potential rather than short-term currency dynamics.
The answer could shape not only the success of Egypt’s privatization programme, but also international perceptions of the country’s investment climate for years to come.
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