Al-Sisi expands the military's economic share

A new network of commercial outlets affiliated with Egypt’s Ministry of Defence has spread widely across the country’s governorates. These outlets specialise in selling dairy products, meat, food items and essential goods, marking the latest public economic activity of the Egyptian military.

The organisation, Future of Egypt for Sustainable Development, affiliated with the Egyptian Air Force, is the exclusive owner of these new stores, which have prime locations in the capital and whose exact number is unknown.

It is worth noting that Egyptian military projects and companies are not subject to financial audits or legislative oversight by Egypt’s House of Representatives or Senate. Additionally, their revenues are not included in the state budget.

Presidential decrees

Under Presidential Decree No. 591 of 2022, the Future of Egypt organisation was established and entrusted with reclaiming 1.5 million acres of land across the country, despite the Air Force’s lack of any role in agricultural activities, which typically fall under ministries of agriculture worldwide.

Since May 2022, the organisation’s activities have rapidly expanded, or rather, its economic empire has grown effortlessly through presidential decrees allocating vast tracts of land to the organisation. These include private properties seized from people under duress, with minimal compensation.

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In October 2023, Al-Sisi allocated 47.4 thousand acres to the Future of Egypt organisation in the Rabaa and Bir Al-Abd areas of North Sinai. A similar decree followed, transferring over 155,000 additional acres in the same governorate to the organisation under the pretext of agricultural development.

In May 2023, 938,076 acres of state-owned land in Beni Suef, Minya, and Aswan were allocated to the organisation for agricultural and developmental projects.

Gradually, the organisation’s influence extended from land allocation to forcible seizures. In September 2023, it appropriated 30,000 acres owned by investors in Ghard Al-Qattaniya, Giza, to add them to the Future of Egypt agricultural production project, according to the independent publication, Sahih Masr.

The military’s expansion reached the fishing industry as well. Bardawil Lake, a 165,000-acre body of water producing over 4,000 tons of fish annually, was transferred from the government’s Fisheries Protection Agency to the Future of Egypt organisation, according to Al-Shorouk, a private Egyptian newspaper.

A significant shift in the organisation’s power came with its newly granted authority to import grains, a role that had for decades been handled by the General Authority for Supply Commodities.

According to a Ministry of Supply statement reported by Reuters, the organisation is now “the sole government body with exceptional authority to organise international tenders and directly contract for wheat and other food imports to meet Egypt’s needs.”

The growing dominance of the empire of the Future of Egypt organisation became evident during an official meeting in August 2023, attended by Al-Sisi, the Prime Minister, Ministers of Agriculture and Irrigation, and the organisation’s Executive Director, Colonel Bahaa Al-Ghannam, to discuss government programs in agriculture, water and fisheries.

Last week, Al-Ghannam outlined the organisation’s plans during a meeting with Environment Minister, Yasmine Fouad. These include agricultural projects spanning 4 million acres, the establishment of a large agricultural manufacturing city, a logistics hub on 500 acres, wheat silos with a capacity of 2.5 million tons, a digital agriculture company, and an eco-city spanning 1,200 acres in Dabaa, northern Egypt, according to state media.

An expansive empire

Parallel to this, the Egyptian military’s economic empire has grown rapidly through presidential decrees, possibly as compensations for military-owned companies expected to be sold to the private sector under IMF conditions.

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One striking example is Presidential Decree No. 17 of 2023, which allocated two kilometres of land on both sides of 31 major roads directly to the military.

This decree transformed the military into the country’s largest landowner, granting it a significant competitive advantage in developing fuel stations, service centres, restaurants and other vital facilities.

Another generous decree, No. 18 of 2022, granted the military ownership of 36 islands in the Nile, stretching from Aswan to Alexandria. Meanwhile, Decree No. 2637 of 2020 transferred the management of Nile riverfront lands from the Ministry of Irrigation to the Armed Forces Land Management Authority, making it the new owner of this land covering approximately 90,000 square meters.

The decision resulted in forced evictions that affected judicial, educational and cultural facilities. These included clubs of the State Council and the Administrative Prosecution, the Faculty Club of Cairo University, the Faculty of Tourism and Hotels at Helwan University, the Operations Department of the Water Surface Police, Umm Kulthum Public Park and several theatres affiliated with the Ministry of Culture.

Subsequent direct allocation decrees included 5,540 acres (about 23 million square meters) in Jumayma, north-western Egypt, allocated for a project named South Med Egypt under the military’s engineering authority.

In addition to such allocations, the military enjoys tax and fees exemptions under Law No. 159 of 2023. It also benefits from cheap labour by relying on conscripts paid EGP 500 (about $10) per month.

No oversight

Egyptian military companies and activities remain beyond public oversight. As a result, listing them on the stock market would require the preparation of clear and transparent financial statements that align with market standards and listing requirements, according to economic researcher, Ibrahim Al-Masry.

Political factors also play a role in whether the military would agree to such listings. The institution may hesitate to disclose its data and profits or fear the potential implications of such transparency on national security. These concerns pose challenges to the prospect of the military withdrawing from economic activities. However, this time, the proposal might be a necessity rather than a choice due to IMF pressures and the need to implement its demands related to expanding the role of the private sector, avoiding monopolies, adhering to the principles of transparency and governance, and liberalising the exchange rate, in exchange for continuing to support Egypt with loans, according to Al-Masry.

In December 2024, Prime Minister Mostafa Madbouly announced plans to sell shares in 10 state-owned companies, including four military firms: Wataniya, Safi, Chill Out and Silo in 2025.

Two years ago, the International Monetary Fund (IMF) announced during its agreement to lend Egypt in December 2022 that it had reached an understanding with Egyptian authorities to publish the financial data of state-owned companies, including military-affiliated companies, during the first quarter of 2023. However, that year passed, as did the following year, while this has not been done.

The situation resembles a game of cat and mouse. While the IMF pressures the Egyptian government to sell shares in military-owned companies and gradually reduce the military’s role in the economy, President Al-Sisi insists on strengthening the generals’ influence, expanding the privileges granted to them and increasing their shares in state-owned companies and lands.

A prominent economist, who requested anonymity, criticised the lack of a comprehensive inventory of projects owned or executed by the military on behalf of others. He pointed out that these projects typically lack financial data that clarify their financial scale, expenses, revenues and the taxes they pay. This disconnects the general budget from the profits of military companies and raises doubts about the Egyptian state’s seriousness in responding to the IMF’s demands.

In a study titled The Egyptian Military as the Vanguard of State Capitalism, Carnegie Middle East researcher, Yezid Sayigh, argued that the military may be excellent engineers but are poor economists.

This aligns with the reality on the ground, where El-Sisi has granted the military more privileges and resources in 2023–2024 than it received since taking power in 2013.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.