Dr. Mohamed Abdel Wahab, an economic analyst and financial advisor, emphasized that the decision to transfer ownership of a piece of land to the Ministry of Finance for use as collateral for issuing sovereign sukuk is a strategic and well-considered move. This approach aims to reduce public debt while ensuring optimal use of state assets without selling or relinquishing them. The state retains full ownership of these assets, which can be further developed to generate sustainable developmental returns.
Abdel Wahab explained that using part of the state’s assets to issue sukuk for refinancing part of the debt under favorable terms reflects advanced financial thinking aligned with global standards of debt management. This decision highlights the state’s commitment to creating new financing tools that alleviate burdens without resorting to traditional borrowing. He pointed out that this comes at a crucial time when the Egyptian economy is showing positive indicators, including an improved trade balance, increased exports, reduced imports, and the central bank’s success in stabilizing exchange rates.
A significant portion of the trade deficit is linked to debt servicing costs. Therefore, this decision seeks to lower debt and its associated costs, directly improving the state’s financial situation and creating additional fiscal space. This space can be directed towards spending on social protection programs, education, and health, which are key priorities at present.
Regarding criticisms of the decision, Abdel Wahab stated, “The current backlash against this step is entirely unjustified and resembles previous unfounded controversies, such as the one surrounding the Ras Al-Hikma project, which later proved highly successful and beneficial to the state without losing ownership. Today, we see the state reapplying this smart model by using assets to generate real income and develop land to create projects and job opportunities without affecting public ownership.”
He added, “It is important to distinguish between selling and using assets as financial collateral. The state has not relinquished its assets but is seeking to maximize their benefits in a way that serves both current and future generations. The land will remain the property of the Egyptian state, represented by the Ministry of Finance and government entities with economic activities, and will be developed to become part of productive, tourism, and real estate projects that serve the national economy.”
Abdel Wahab stressed that this decision reflects a conscious political will and institutional capacity to manage resources professionally. He concluded, “As long as we have resources that can be utilized to achieve economic and developmental goals and contribute to reducing public debt, encouraging such steps is a duty, not attacking them without basis.”
“What is happening is a model of good management of public assets, utilizing them to finance the state’s needs without burdening future generations. We need to support this approach rather than questioning it, especially amid current economic challenges that require innovative and out-of-the-box solutions.”
— new from جريدة النهار المصرية