The National Investment Bank (NIB) will “not be around much longer,” according to Egyptian Finance Minister Youssef Boutros-Ghali.
The minister’s curt reply came in response to a question posed by Al-Masry Al-Youm in which the minister was asked about the future of the bank after the new Social Insurance and Pension law is fully enacted in 2012. Boutros-Ghali then declined to offer further details about the bank’s future.
The NIB was established to finance government investment in public companies, public-private partnerships and infrastructure projects. It also represents the primary investor for government-collected social insurance funds. There is no mention of the bank in the new social insurance law.
Former Undersecretary of Social Insurance Mohamed Atia Salem stated that the future of the bank remained unclear. He said that, while the bank had been previously responsible for financing public projects, this had become an increasingly insignificant component of the bank’s activity in recent years. Instead, the government now depends on the bank to finance its deficits, explained Salem, which he views as a departure from the institution’s original role.
The undersecretary went on to note that the Social Insurance Authority’s deposits at the bank were not matched by assets, pointing out that the bank was not currently engaging in any investment activity in the proper sense of the term.
Mohamed Moeet, Assistant Minister of Finance for Insurance and Pensions, stated that the NIB’s net indebtedness–which he put at roughly LE60 billion–was related to government policy.
However, a report issued by the Egyptian Central Bank on Sunday estimated that the bank’s total indebtedness amounted to LE146 billion as of the close of the last financial year. This amount represents 16.5 percent of the government’s net internal debt of LE863.3 billion.
Translated from the Arabic Edition.
