Saving up for a rainy day
Egypt is setting up its own Sovereign Wealth Fund with a capital of EGP 200 billion named the 'Misr Fund'. According Reuters, the Egyptian Government has approved EGP 5 billion as start-up capital for the fund.
Amr El-Gohary, a member of the parliament's economic committee, stated that the balance from the start-up fund will be paid over 3 years according to Al-Borsa. The main source for the fund's resources would be from the assets base, meaning Egypt would begin taking a certain amount of revenue from commodity exports or - if necessary - from foreign exchange reserves.
The fund will be used to invest inside Egypt as well as abroad with the over-all goal of developing Egypt's assets and natural resources for future generations. Egypt Independent stated that the law and fund were created as a way to regulate Egypt's misused wealth as the ASA (Accountability State Authority) and other auditors will be double checking the funds books to make sure nothing slips through the cracks, however the Parliament will not be authorised to monitor the fund. The law that created the fund allows the president to transfer ownership of any inefficient or underutilized state asset to the fund for better management and oversight according to MENA.
World's Largest Sovereign Funds in 2015/ Geopolitical Intelligence Services
After Egypt's currency crisis, the flight of capital, and lack of tourists, this is seen as an attempt to invite investment and improve the image and attractiveness of investing in Egypt.
Sovereign Wealth Funds are basically a savings account countries that allows them to have a sustainable revenue source, looking at the long term financial gains as well as rainy day money (or war in the case of Kuwait in 1990). The Middle East currently has a combined total of $2.95 trillion according to the Sovereign Wealth Fund Institute, and Egypt is one of the last countries to start their own Sovereign Wealth Fund.
Main Image by Nile International