In November 2019, the Egyptian Minister of the Public Business Sector Hisham Tawfik, announced that a plan is currently underway to implement legislative, regulatory and administrative reforms at public sector companies.
Tawfik explained the public business law (203/1991) was passed to help solve the problems facing the public sector companies.
But later this law was amended to help liberalise this sector and help its companies stand up to competition from the private sector, which has become the dominant player in the Egyptian economy since the 1990s, Tawfik reported.
In addition the legislative and administrative amendments also aim to boost transparency and governance rules in the public business sector.
Later, in May 2020 Egypt's parliament approved the amendments to public business sector law no.203 of 1991 that regulates the public business sector and its companies, which issued officially today, by the president Abdel Fattah El-Sisi.
The new amendments include setting new rules for forming holding company boards and company affiliates, expanding the powers of general assemblies regarding the assessment of board performance.
As well as stimulating employees and boards to upgrade their performance and increase the companies’ profits, and increasing transparency and disclosure levels in the companies that belongs to the sector.
Also, improving the sector’s companies, upgrade their performance, financial structures, management, and making the ultimate use of their assets to ensure their sustainability and to increase their contribution to the national economy, according to the statement .
It allow workers to have a share of the annual profits disbursed in cash with a minimum of 10 percent and not exceeding 12 percent, and giving the holding companies and their affiliates the right to take part in founding new companies.
According to the Public Business Ministery
statement, it also target uplifting the companies’ competitiveness in domestic and external markets.
On other hand, the sector has 121 affiliated companies employing 214,000 workers. Seventy-three of these companies have profits totaling LE14.8 billion, while 48 have losses of LE7.4 billion.
According to the Public Business sector Ministery, When a company is losing half of its capital or more, shareholders must inject fresh money, or they must make a decision to liquidate or to merge it with other companies.
During the fiscal year 2017-2018, the losses of 48 publicly-owned companies amounted to LE16 billion, and had LE44 billion in debt. Companies that provide no benefit will be closed, the ministry reported .
Noteworthy, the public business sector law has not witnessed changes since its issuance in 1991 despite the shifts that Egypt’s economy has witnessed in that period, which should be met with reforming regulations for the sector’s companies.
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