Why are Egyptians afraid to privatize endowment assets?

Cairo – The Egyptian Endowments Authority (EWA) has been the subject of renewed controversy after the government announced its intention to inventory the organization’s assets in preparation for offering them to the private sector, a move that drew wide reservations from economists, jurists and some members of parliament.

Renewed controversy

Former Minister of Religious Endowments Sheikh Mohamed Metwally al-Shaarawi admitted to corruption within the Endowments Authority in the mid-1970s during a famous parliamentary interrogation. Today, the controversy is renewed after Prime Minister Mostafa Madbouly announced that his advisor for religious affairs, Osama al-Azhari, will conduct a comprehensive inventory of the authority’s assets and identify investment opportunities to offer these assets to the private sector or repurpose them to support the state’s treasury.

How much are Egypt’s endowments worth?

The value of what the Endowments Authority manages is widely disputed, with observers attributing the conflicting figures to a discrepancy in valuation, in light of high inflation rates and the devaluation of the pound against the dollar over the past few years by large percentages.

• The total market value of Egypt’s endowment assets exceeds 3 trillion Egyptian pounds (more than $60.3 billion), according to statements by officials at the Ministry of Endowments in 2023 and 2024.
• The president noted Abdel Fattah al-Sisi said in 2018 that the size of the endowment is 114,000 endowment pieces, endowment assets are estimated at 180 billion pounds, and the size of agricultural land is estimated at half a million acres of agricultural land and gardens.
• The endowment represents a quarter of Egypt’s real estate wealth, with an estimated value of EGP 157 billion in 2025.

Where is this wealth concentrated?

• Endowment assets are spread across Egypt, in both urban and rural areas.
• Some of the areas where important endowment assets are located include the Ataba Market, Ataba Square and Street, Al-Azhar, Al-Azhar District, Abdel Aziz Street, Al-Ghoria, Fatima Al-Nabawiya, the Arms Market and Khayamiya, the Hajj and Clothing Agency (Radwan Bey), the palaces of Prince Mohamed Ali and King Fuad in Kafr El-Sheikh, and the Musalla archaeological area, in addition to many palaces, basilicas and antiquities.
• The Ministry of Endowments also owns 17 endowments in Greece, including Muhammad Ali’s palace.
• The Endowments Authority is specialized in owning land in the finest areas of the Delta such as Dakahlia, Damietta, Kafr El Sheikh, the North Coast, Damietta Port, Gamasa, and Baltim.

What sectors are they in?

• Real estate and land: Residential and commercial real estate, agricultural land, and vacant land.
• Financial investments: Shares in some banks and companies, and buying companies and factories outright.

The Endowments Authority is looking to invest in areas such as construction, animal and livestock production, packaging, mining, financial services and insurance, agriculture, various industries (plastic, wood, pharmaceutical, food), hotels, electricity and renewable energy, restaurants, resorts and tourist villages, transportation and logistics, according to the General Authority for Investment and Free Zones (GAFI).

Who manages endowment assets in Egypt?

• The Egyptian Endowments Authority, a governmental body under the Ministry of Endowments, manages and invests endowment funds.
• The authority operates under Law No. 209 of 2020, which reorganizes the Egyptian Endowments Authority.
• The Authority acts on behalf of the Ministry of Endowments in managing and investing the funds it specializes in.

The authority announced its readiness to provide 31 plots of land in 11 governorates to partner with the private sector in economic projects.

The authority is allowed to hire public, private or other legal persons to collect its revenues in exchange for a commission.

Despite previous promises of comprehensive inventories, the former head of the authority, Salah Gneidi, revealed that the inventory project he initiated was not completed due to his retirement, indicating the absence of a sustainable institutionalized documentation system.

How transparent are the numbers?

According to economist Ahmed Khouzaim, the disparate official and unofficial estimates of the wealth of the endowments reflect a clear lack of transparency, with the ministry citing EGP 1 trillion, while other sources talk about EGP 3 trillion.

In comments to Al Jazeera Net, Khozaim explains that the authority owns about half a million acres of land, but the ministry only recognizes the ownership of 420,000 acres, which means that at least 80,000 acres have been lost or seized, and the authority owns 120,000 housing units, mostly concentrated in Cairo and the governorates, in addition to properties abroad in countries such as Saudi Arabia and Turkey and Greece.

Khouzaim warns that offering these assets without a clear legal framework could open the door to financial corruption and legal violations, adding: “The government does not have the right to dispose of these funds, but only to manage them according to the terms of the endowment.”

He called for the establishment of an independent endowment fund subject to parliamentary oversight and managed according to strict financial and administrative standards, rather than relying on clerics who, in his opinion, do not have the competence to manage a portfolio estimated at trillions of pounds.

Privatization and heirs’ disputes

Political economy professor Abdelnabi Abdel Muttalib supported the idea of developing the management and development of endowments, but warned that this could turn into a cover for privatizing or selling endowments to make up for the state’s revenue shortfall.

In a comment to Al Jazeera Net, he suggested applying what is known as the “exchange system,” which allows the sale of a low-value endowment asset and the purchase of another, provided that the spending direction specified by the endowment is maintained.

Abdulmuttalib warned that selling or leasing assets directly would violate the Waqf Law and expose the state to lawsuits from heirs or those who have legal or legitimate rights to them. He also expressed concern about converting endowments into monetary assets instead of fixed objects, exposing them to the risk of erosion due to inflation or market fluctuations.

Alarming scenarios

Other warnings came from a member of the Constituent Assembly for the 2012 Constitution, Counselor Mohamed Naji Darbala, who warned that the state’s plan to amend the Landlord and Tenant Law may be linked to a plan to hollow out the center of Cairo of its residents and turn it into a tourist destination, especially since many of the properties there are subject to endowments or the old rental system.

Darbala noted that the Endowments Authority has already started replacing its assets in downtown Cairo with assets in the new administrative capital, telling Al Jazeera Net that this “replacement” may be a cover for removing properties from their historic locations.

He questioned the state’s intentions to invest endowment assets in the stock market, similar to the experience of social insurance funds, which have incurred huge losses without accountability, he said.

Involving the private sector is a “unilateral decision”

In turn, a member of the House of Representatives expressed Democratic Party Sanaa Al-Saeed expressed surprise that a file of this magnitude was not discussed within parliament, emphasizing that “the decision was taken unilaterally without social dialogue or parliamentary debate.”

She stressed that endowments are private property that cannot be disposed of without reference to the terms of the endowment.

Al-Saeed pointed out that there are more than 40,000 violations related to endowment properties, calling for them to be recounted and the usurped ones recovered before thinking about involving the private sector.

The MP suggested establishing endowment funds managed by specialized economic competencies to ensure the optimal use of endowment revenues, while preserving the legitimate purposes of the endowment, and linking the revenues to development projects that serve society in education, health and combating poverty.

Waqf is not public money

Former Assistant Foreign Minister and former Ambassador Mohamed Morsi emphasized that “endowments are individual property, not government property,” noting that the endowment holders endowed their property for the purposes of righteousness, and no government has the right to change these purposes.

Morsi said that an inventory can be useful if it is done with the aim of reforming the administration and recovering encroachments, but warned that any move towards leasing or selling must be temporary, clear and limited to periods not exceeding 20 to 25 years, and with strict conditions that ensure the continuity of the endowment’s purpose.

Ambassador Morsi called for the management of this wealth to be handled by specialized economic experts, while the religious presidency remains only symbolic or supervisory.

Speaking to Al Jazeera Net, Morsi warned: “Selling endowment properties is more dangerous than selling state properties. “These are not public property, but private donations reserved for good works, and it is not permissible to dispose of them under any political or economic circumstance.

Jurisprudential position

The former Deputy Minister of Endowments, Sheikh Salama Abdel Qawi, said that Islamic law views the endowment as a noble act that cannot be infringed upon, and gives the conditions of the endowment a status equal to the legal texts themselves.

Speaking to Al Jazeera Net, Abdul-Qawi explained that the rule of “the condition of the endowment as the text of the street” means that any condition set by the donor in his endowment – whether it is a condition for marrying orphans, supporting students of science, pilgrimage, or others – must be respected and adhered to, stressing that disposing of endowment funds in violation of these conditions is a clear religious and legal betrayal.

He added that the sharia places the duty on those in charge of endowments, such as the Ministry of Endowments or Al-Azhar, to implement these conditions without distortion or deception. The minister, or his representative, is not considered the owner of the endowments, but rather a caretaker, and his task is closer to that of an “administrative servant,” who has no right to sell, exchange or reallocate them except under strict conditions and after reviewing the interests of the endowment and those to whom it is assigned.

Abdulqawi continued: “The idea propagated by some that endowments are unaccounted for or unknown is a fallacy. Egypt’s endowments have been documented with legal arguments and official documents for decades, but there is a deliberate omission of this information from public opinion for the purpose of manipulation.”

Sheikh Salama Abdel Qawi emphasized that endowments are a religious and societal responsibility and a heavy trust, which should not be taken lightly or managed according to immediate political or economic interests.

Prime Minister Mostafa Madbouly responded to his controversial statements by saying in a press conference a few days after his meeting with the Minister of Endowments that the government will not sell the assets of the Endowments Authority, but will work to maximize their revenues through strategic partnerships with the private sector, indicating that the goal is to make the most of these assets to support the economy and development, while maintaining full state ownership of them.

Madbouly added that this is part of a wider plan to capitalize on the state’s unutilized assets, stressing that all procedures are done legally and transparently, taking into account the social and legal dimension of the endowments.