Egypt has announced plans to sell stakes in several military-owned companies through its $12 billion sovereign wealth fund, marking a significant shift in the country's economic strategy. The move is aimed at enhancing private sector involvement and meeting the conditions set by the International Monetary Fund (IMF) for Egypt to access an expanded $8 billion loan package.

The companies slated for divestment include Safi, Wataniya Petroleum, Chillout, Silo Foods, and the National Company for Road Construction, according to a cabinet announcement on Wednesday. This is part of a broader privatization drive that aims to sell stakes in at least 10 companies in 2025, including two military-owned entities.

The Egyptian government's decision to relinquish control of key assets is a significant departure from its historical reluctance to do so. The military has expanded its economic footprint rapidly since President Abdel Fattah al-Sisi took office in 2014, with dozens of military-owned enterprises emerging as major players in the economy. This has sparked concerns among local businesses and foreign investors over potential unfair competition.

However, the government maintains that the military-backed companies help fill critical market gaps and that there is a level playing field for all businesses. The sovereign wealth fund, established in 2018, was designed to attract foreign investment and encourage private-sector partnerships in state-owned enterprises.

In addition to the divestment of military-owned companies, the sovereign wealth fund will also offer old government buildings in downtown Cairo to investors starting in July, according to Prime Minister Mostafa Madbouly. This move is expected to attract significant foreign investment and stimulate economic growth in the country.

The implications of this move are far-reaching, with potential benefits for both the Egyptian economy and foreign investors. The divestment of military-owned companies could lead to increased competition and efficiency in key sectors, while also providing a boost to the country's privatization efforts. However, it remains to be seen how the government will balance the interests of local businesses and foreign investors with its own economic goals.

As Egypt navigates this significant shift in its economic strategy, it will be important to monitor the progress of the divestment process and its impact on the country's economy. With the IMF's loan package hanging in the balance, the success of this initiative could have far-reaching consequences for Egypt's economic future.