A member of the Egyptian Parliament's Economic Affairs Committee, Mohamed Fouad, has expressed concerns over the government's strategy to reduce public debt by allocating state-owned lands. In a recent TV appearance, Fouad emphasized that the economic implications of such a move are more important than the mere allocation of land. He questioned whether this approach actually solves the problem or merely postpones it. This criticism comes after the allocation of 112 million square meters of land in the Red Sea region to the Finance Ministry.
The allocated land in the Red Sea region is equivalent to approximately 60 percent of the size of the land previously allocated in Ras Shuqair. A presidential decree issued on June 4, 2025, had allocated 174 million square meters in Ras Shuqair area to the Finance Ministry, with the objective of reducing public debt and facilitating the issuance of sovereign "Sukuk" (Islamic bonds). However, 17 months have passed without the development of an operational plan or a preliminary framework, raising questions about the ultimate fate of these lands and their utilization mechanisms.
Fouad has submitted a formal inquiry to uncover details surrounding the allocation of the 112 million square meters of land in the Red Sea region. He is also seeking clarification on the status of the previously allocated land at Ras Shuqair, the nature of the arrangements made for it, and what has actually been achieved since its initial allocation. Furthermore, Fouad demanded an accounting of the funds generated and the sources intended for settling existing obligations.
The MP raised questions regarding the mechanism for paying returns on sovereign "Sukuk" (Islamic bonds) once they are issued. He inquired about the source of the profits and financial flows that would be used to meet these obligations, particularly in scenarios where the land has not yet reached the operational stage and is not yet generating revenue. Fouad called for clarification on the financial engineering of the process and how financial flows are distributed among the parties involved.
Fouad emphasized that his objection does not concern the use of state assets or the nature of the financial and investment transactions themselves. Rather, he stressed the necessity of understanding the economic returns generated thereafter, pointing specifically to previous deals such as Ras el-Hekma and Alam al-Roum. He advocated for the operationalization of assets and the establishment of projects that generate sustainable revenue, thereby helping to alleviate the state's financial burdens in the long term.
The MP underscored the importance of shifting away from financing deals aimed solely at debt repayment. Instead, he suggested that the focus should be on generating sustainable revenue through the operationalization of assets. This approach, according to Fouad, would help alleviate the state's financial burdens in the long term. The House of Representatives has the authority to hold the government and the relevant minister accountable regarding how these lands are being managed and the expected economic returns.
The controversy surrounding the allocation of state lands to reduce public debt highlights the need for transparency and accountability in Egypt's financial dealings. As the government continues to explore ways to address its financial challenges, the role of the Parliament in overseeing these efforts and ensuring that they align with the country's long-term economic goals will be crucial. The outcome of Fouad's inquiry and the government's response will likely have significant implications for Egypt's economic policy and its efforts to reduce public debt.
Key points
- Egyptian MP Mohamed Fouad criticizes the allocation of state lands to reduce public debt, citing concerns over economic implications and lack of transparency.
