A successful stake sale would have been the perfect tonic for a revived Egyptian economy. But divestments are put on hold, and government has given no indication when it plans to take it up again. Image Credit: Gulf News Archive

Cairo: Egypt has put on hold its plans to offer stakes in state-run companies due to "unfavorable" market conditions created by the coronavirus pandemic, dealing a setback to the country's programme to strengthen the economy.

The Public Enterprise Minister Hisham Tawfik didn't say when the programme could be resumed. Investors are returning to the local debt market after have pulling out around $17 billion during the COVID-19 outbreak, but authorities have already sharply scaled back growth projections.

The government had sought to sell additional stakes in more than 20 companies to overhaul a bloated and loss-making public sector as part of its broader effort to revive the economy after years of stagnation. The companies ranged from banks to fertilizer makers.

Before the virus outbreak, Egypt's was one of the fastest-growing economies in the Middle East, and the country was set to focus on private sector growth and development in the latest phase of its sweeping reform programme. The overhaul began in late 2016 with a dramatic currency devaluation and subsidy cuts to secure a $12 billion International Monetary Fund loan.

Many of the companies slated for stake sales are already listed on the Egyptian exchange, but others would be newly offered on the bourse.