It appears that the military has concluded that some degree of transparency is tolerable in exchange for access to capital through the sale of equityEgyptian President Abdel Fattah el-Sisi. Picture: REUTERS/VASILY FEDOSENKO
That isn’t to say no change is coming. To sell any equity the military will have to publish valuations of the companies concerned. Historically, the financial affairs of the military and its businesses have been off limits to the public, on grounds that their disclosure risked national security. The argument that the finances of fish-processing plants and macaroni factories are sensitive state secrets will have to be dropped for any investments to move forward.
The National Service Products Organisation, which is affiliated to the defence ministry, will able to raise capital through the private market to fuel its investments and expansion, rather than relying on its cash flow and loans from state banks. This new effort to raise capital through private investments is an elaboration of the political economy of the Sisi government that has been taking shape since the coup in 2013. The growth sectors of Egypt’s economy have a large presence of military-owned enterprises.