Ashraf Negm, deputy chairman and executive director of the state-owned National Investment Bank (NIB), said on 11 August that the government has no plans to liquidate the bank. "The government is currently implementing its intention, announced three years ago, to restructure the bank. The committee in charge of drafting the restructuring plan includes experts and specialists and changes will be implemented within the framework of the structural reform of the Egyptian economy." According to Negm, the restructuring will include a clear timetable for rescheduling the repayment of outstanding loans made by the bank to government institutions. "Some of these financial entanglements have already been settled," said Negm, mostly via the NIB acquiring high-value assets from indebted organisations. "Efforts are also underway to maximise the value of the bank's assets in order for it to play a more pivotal role in the national economy," and a complete administrative overhaul is scheduled, revealed Negm. Rumours that the government intended to sell NIB-held shares in indebted companies to private investors within 18 months filled the local media in recent days, with some outlets claiming the IMF had recommended NIB halt credit to government institutions, cut its financial obligations, and accept public assets in return for settling outstanding loans. NIB was established in 1980 to fund government projects. According to Law 119/1980, the NIB is a non-commercial bank mandated to fund national development projects. Major recent recipients of NIB funding include petrochemical and oil projects, banks (eg the Egyptian Bank for Export Promotion), the media (Egyptian Media Production City and the Egyptian TV Satellite Company), fertilisers (Abu Qir Fertilisers and Chemical Industries), housing (Nasr City for Housing and Reconstruction), and the steel industry (Ezz-Dekheila Iron and Steel Company). NIB is also a major investor in the cement sector (Suez Cement Company), transport (the Egyptian Company for Trade and Transport Services), and the food and agricultural sector. In February, NIB Executive Chairman Mahmoud Montasser said that "since many government institutions, economic and service organisations, were unable to repay loans, the government, in coordination with the IMF, had determined that the bank should accept assets to settle outstanding debts." Montasser added that, in line with IMF recommendations, the NIB had stopped offering loans to government institutions. "It was agreed that the NIB should first settle outstanding loans before it extended any further credit," Montasser said. The NIB had, controversially, been exempted from Central Bank of Egypt supervision, an exemption that the IMF has insisted must end. Montasser also revealed that "the National Bank of Egypt has taken overall NIB-owned investment certificates (valued at LE435 billion) to be reinvested in a more profitable way." Press reports had suggested that the government was seeking to transfer NIB assets and shares to the Egypt Sovereign Fund. Hala Al-Said, minister of planning and economic development, announced in May that the NIB would be restructured in order to allow it to continue funding development projects, but on a much sound economic basis.
*A version of this article appears in print in the 19 August, 2021 edition of Al-Ahram Weekly
