Government advisor: Sovereign guarantees to the private sector will contribute to the industrial ren

The financial advisor to the Prime Minister, Mazhar Muhammad Saleh, confirmed on Saturday that sovereign guarantees for the private sector will contribute to the industrial renaissance, indicating that it is a practical application of the government’s approach to modernizing the national industry.

Saleh said, in a statement reported by the official news agency, and seen by Al-Iqtisad News, that “sovereign guarantees are pledges from the government that it is a sovereign power to guarantee the payment of debts or financial obligations owed by another entity such as a company or a subsidiary government entity,” pointing out that “Sovereign guarantees have taken another direction, which is to guarantee the activities of the national private industrial sector, based on what was stated in Article II/3 of the Federal (Tripartite) General Budget Law No. 13 of 2023, as Article II/3 of the above law stipulates: The Minister of Finance With the approval of the Federal Council of Ministers, the Federal Council of Ministers shall issue the necessary guarantees to support the agricultural and private industrial sectors to establish projects that will be financed by foreign institutions at a rate of no less than 85% of the value of each project and a total amount not exceeding one trillion dinars.

He added, “Based on the above, this guarantee issued by the state’s sovereignty makes it easier for those companies or entities in the private sector to obtain external financing in particular, especially since investors or lenders feel more secure in the presence of the government guarantee to proceed with their projects that are carried out with careful choices.” It helps the industrial renaissance in the country, and contributes to diversifying the sources of national production, especially the renaissance of the private industrial sector, provided that the private sector benefiting from the sovereign guarantee contributes by providing a percentage of financing for its industrial project from its own funds, not less than 15% of the total value of the project financing.” .

He stated that “including the private industrial sector with sovereign guarantees is nothing but a practical application of important aspects of the philosophy of the government curriculum, which aims to modernize the national industry and with the state’s guarantee for the private industrial sector and consider it a strategic basis for economic diversification and in accordance with the principle of applying the economic partnership between the market and the state, the latest of which is a decision.” The Council of Ministers allowed the activation of Article 35 of the Public Companies Law No. 22 of 1997, as amended, by making dozens of public industrial companies become public joint-stock companies. 

Saleh continued, “The priorities of the Sovereign Guarantees Committee, which is responsible for following up on implementation and in accordance with what was stated in the General Budget Law (Tripartite), are directed toward supporting the industrial sector, and that the goals of the committee constitute at the same time one of the government’s priorities in maximizing rates of economic development and its sustainable opportunities for growth and building.” Accumulating human capital, combating the phenomenon of unemployment, and enhancing economic well-being.”

He pointed out that "the first aspect is represented by industrial advancement and through financing partnerships by granting sovereign guarantees to the private sector producing industries, medical supplies, and export supplies for medicines. The second aspect relates to the industrial base related to infrastructure, especially building and construction projects, whether from iron, brick or cement factories." And others, and the third aspect is related to the diversification of the oil sector itself, especially the chemical and petrochemical industries, in addition to energy projects and industries related to agriculture.”