Egypt Follows Saudi and UAE Sovereign Wealth Restructuring
Egypt abolishes its Public Business ministry as Gulf states restructure sovereign wealth funds, a transition underscoring broad and deep regional political economic restructuring post Gaza ceasefire.
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Egypt has abolished its Ministry of Public Business Sector in a restructuring move that mirrors parallel shifts unfolding across the Gulf, though Cairo’s reorganisation stems from acute fiscal necessity rather than the portfolio optimisation driving changes in Abu Dhabi and Riyadh. The ministry, which oversaw 146 state-owned enterprises representing roughly a quarter of Egypt’s total SOE portfolio, was eliminated through a Republican Decree approved by parliament on 10 February 2026 after a decade of operation that critics argued had become redundant and costly.
The decision transfers oversight of firms spanning tourism, pharmaceuticals, chemicals, textiles and construction to sectoral ministries and a newly established State-Owned Enterprises Unit tasked with auditing assets and standardising performance metrics. The move was described as an overdue efficiency measure that eliminates bureaucratic layers whilst positioning firms for potential conversion to Company Law No. 159 of 1981, which would grant them commercial autonomy for partnerships, capital raising and divestitures without direct ministerial interference.
The restructuring arrives as Egypt navigates the final reviews of its expanded IMF programme, with 2026 framed by officials as a turning point following March 2024 reforms that devalued the pound, imposed a strict EGP 1 trillion ceiling on public investment and pushed private sector investment to 57% of total capital formation. Growth forecasts have been revised upward to over 5% for the current fiscal year with medium-term targets of 7%. Nonetheless, the fragmenting ownership across multiple ministries risks creating siloed management with weakened unified performance evaluation and conflicts between short-term political priorities and long-term value maximisation.
Saudi’s megaproject retrenchment
Saudi Arabia announced in February 2026 that it would release a substantially revised version of Vision 2030 and restructure the sovereign wealth fund, with Finance Minister Mohammed al-Jadaan signalling a formal retreat from the megaproject excess that had defined the original Vision. The pivot comes amid persistent budget deficits driven by subdued oil prices, with Riyadh openly stating it will defer or cancel costly initiatives without hesitation if return-on-investment thresholds are not met.
The Line, the 170-kilometre linear city at the heart of Neom that was to house nine million residents, has been drastically downsized and redesigned. Other flagship projects including Trojena’s ski resort for the 2029 Asian Winter Games and elements of Qiddiya have faced similar scaling back or postponement. Construction contract awards plunged 72% year-on-year in the second quarter of 2025 according to investor briefings, whilst the Public Investment Fund took multibillion-dollar writedowns on gigaproject assets.
The fund is set to shift emphasis from launching headline-grabbing schemes to accelerating delivery on existing commitments, with stronger focus on technology, tourism, logistics and domestic industrial companies rather than speculative mega-infrastructure.
Abu Dhabi’s sovereign consolidation
The UAE executed a major sovereign wealth restructuring on 30 January 2026 when Abu Dhabi’s newest fund, L’imad Holding, absorbed peer ADQ in a consolidation that created a roughly $300 billion entity under Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan. ADQ had previously managed $263 billion and was chaired by Sheikh Tahnoun bin Zayed Al Nahyan, the president’s brother and national security adviser, who continues to chair the emirate’s largest fund, the Abu Dhabi Investment Authority, with an estimated $1.2 trillion under management.
The merger places Sheikh Khaled directly in control of assets including Etihad Airways, power and utilities firm TAQA, McLaren Racing, agricultural commodities trader Louis Dreyfus and Abu Dhabi Ports. The consolidation was executed under a Supreme Council for Financial and Economic Affairs resolution and framed by the Abu Dhabi media office as creating a sovereign investment powerhouse with a diversified asset base to support sustainable investment and economic development.
Unlike the fiscally driven adjustments in Saudi Arabia and Egypt, the UAE’s move stems from portfolio optimisation aimed at enhancing global competitiveness and returns in a persistently low-yield environment. Diversification is accelerating into artificial intelligence, semiconductors and critical minerals, positioning Abu Dhabi’s consolidated sovereign apparatus to compete with peers like Singapore’s Temasek and Norway’s Government Pension Fund Global. L’imad emerged publicly in December 2025 as one of the Gulf backers of Paramount-Skydance’s $108 billion bid for Warner Bros, signalling its ambitions as a heavyweight international investor.
Convergence amid divergent drivers
Egypt’s abolition of its Public Business Sector ministry follows the same institutional logic as Abu Dhabi’s sovereign wealth merger and Saudi’s project cancellations, though the motivations differ sharply. Where the Gulf states act from positions of accumulated hydrocarbon wealth however strained, Egypt restructures from the edge of debt distress following years of dollar shortages, post-devaluation inflation and sovereign debt pressures that necessitated repeated IMF interventions.
This regional convergence underscores a broader Middle East pattern as post-oil political economies confront global energy transition pressures, multipolar finance and domestic delivery constraints. Saudi’s pragmatic retreat from gigaproject excess, Abu Dhabi’s sovereign consolidation for alpha generation and Egypt’s forced rationalisation of bloated state capitalism all point to a reckoning with the limits of statist development models that dominated the region for decades. Where they diverge is in the margin for error, with Gulf petro-states retaining fiscal buffers to absorb mistakes whilst Egypt’s restructuring carries existential stakes for economic stability and political legitimacy in a country of 110 million navigating structural transformation without the hydrocarbon cushion that underwrites experimentation in Riyadh and Abu Dhabi.
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