In late July 2026, a new law designated the Future of Egypt Authority for Sustainable Development (FOEA) a presidency-affiliated “institution of a special nature,” granting it administrative and financial independence along with unprecedented economic, organizational, and investment powers.
The law capped the rise of an entity that began as a land reclamation project in 2017 and has since become one of Egypt’s most significant economic actors. Earlier this year, for instance, the FOEA secured a presidential authorization granting it the exclusive power to approve rice exports, which had been banned for years to conserve water, in return for a hefty fee.
The FOEA reflects a broader pattern in the management of the economy under President Abdel Fattah El Sisi. Resources and decision-making powers have shifted away from government ministries and agencies bound by standard regulation and parliamentary oversight, to authorities, funds, and companies with special legal status, many with direct links to the presidency. The rationale is that these entities can deliver results more efficiently than government bodies weighed down by bureaucracy and layers of accumulated legislation.
What matters, however, is not whether the authority can execute projects quickly, but rather the institutional, political, and economic costs of granting such broad powers to one entity. Who sets its priorities? Where do its returns go? Who oversees it? What will happen to the economy and society as this model expands? And, most importantly, will this model succeed in solving Egypt’s chronic economic problems?
From agriculture to everything
In 2017, the FOEA was launched as a land reclamation project affiliated with the Egyptian Air Force, amid a wave of national projects announced by the president. Its role continued to grow in the agricultural sector until it became responsible for the Western Desert’s New Delta Project. Colonel Bahaa Al-Ghannam, the FOEA’s director, says the project, alongside others, aims to increase Egypt’s cultivated land by around 45 percent, a figure that may be considerably exaggerated.
Over the years, the FOEA’s activities expanded into processing and storing food. It built grain silos and moved into the trading and manufacturing of oils and animal feed, and others. In December 2024, the FOEA took over wheat imports from the General Authority for Supply Commodities, which had managed the file for decades. It also expanded into education, health and real estate through the Jirian project, in partnership with private sector developers. By 2026, its activities had extended further into logistics, infrastructure, and technology.
The new law cleared the ambiguity, formalizing and expanding the powers the FOEA had already been exercising, creating a new economic and administrative powerhouse within the state
The FOEA carried out these activities on the basis of Presidential Decree No. 591 of 2022, which was not published in the Official Gazette, leaving its legal status and the scope of its powers shrouded in uncertainty. The new law cleared the ambiguity, formalizing and expanding the powers the FOEA had already been exercising, creating a new economic and administrative powerhouse within the state.
The law allows the authority to establish so-called “sustainable development” zones. These are geographical areas, to be designated in the future, that have “national strategic importance,” over which the FOEA will have full administrative jurisdiction, shared only with the Ministry of Defense. In these zones, the authority controls the business environment; approves plans, issues licenses, determines fees and exemptions, regulates imports and exports, and oversees the projects operating within them.
The law also allows the FOEA to establish a sovereign wealth fund and a social services fund, and exempts it from laws governing the ownership of public bodies and government contracting.
An institutional headline that unifies the parallel state
The official argument for establishing new entities to manage the economy rests on the idea that the traditional administrative apparatus has become slow, weighed down by regulations and overlapping mandates. Major national projects, the argument goes, require unified leadership, contractual flexibility, and the ability to transfer assets, allocate land, and make decisions quickly. This argument is not unfounded. Egypt’s bureaucracy does suffer from cumbersome procedures, fragmented administrative authority, and weak coordination; those who control the resources are often different from the decision makers.
Early signs of this philosophy emerged early in Sisi’s tenure, with laws restricting citizens’ right to challenge public contracts and allowing government contracts to be awarded directly without competitive tendering. As a result, economic entities affiliated with the country’s sovereign bodies came to dominate government contracting.
This was institutionalized through the establishment of the Sovereign Fund of Egypt in 2018. Exempted from the rules regulating government contracts and authorized to take ownership of public assets by presidential decree, the fund became a key intermediary in the wave of Gulf acquisitions of Egyptian assets that began in 2022.
The same logic was replicated in other institutions. The Armed Forces Engineering Authority has overseen many of the country’s major road and housing projects, while the Armed Forces Land Projects Authority became a partner in the New Administrative Capital. In agriculture and food, the model took shape through Armed Forces companies responsible for greenhouses, aquaculture, and livestock production, as well as privately-held government companies established to manage land reclamation projects.
The FOEA provides this institutional fragmentation with a single, expandable umbrella, becoming the institutional headline that unifies the parallel state, rather than merely another government body
These bodies vary in legal form but share a common logic. They execute national projects through sovereign decisions, their revenues do not flow into the public budget, and they operate outside the conventional framework of government spending. The FOEA provides this institutional fragmentation with a single, expandable umbrella, becoming the institutional headline that unifies the parallel state, rather than merely another government body.
The FOEA enjoys features that could have presumably helped reform the state’s existing institutions: unified leadership, employment flexibility, contracting speed, and the ability to bring together land, funding, and implementation under one roof. Meanwhile, other government agencies remain subject to the same rules the FOEA was designed to bypass. The success of this exceptional institution thus becomes further evidence of the failure of standard institutions, and a justification for granting it more powers instead of reforming regulation.
Reforming the state’s economic role
Granting the FOEA such powers raises serious questions about the government’s commitment to its program with the International Monetary Fund (IMF), which runs until December 2026. One of the program’s cornerstones is reducing the state’s footprint in the economy, particularly that of its sovereign entities. Under the program, the government was set to create a level playing field where the private sector can compete with public sector entities for land, financing, and government contracts. The aim, as the IMF has framed it, was for the private sector to become the main driver of investment and economic activity, so that stable macroeconomic indicators could translate into sustainable growth.
The State Ownership Policy Document highlights this commitment, naming sectors in which the government would reduce its footprint, including agriculture, real estate, and power generation. The document retains a role for the state in land reclamation and irrigation, but the FOEA has gone beyond it, expanding into production, manufacturing, storage, trade, and real estate—activities from which the state was supposed to withdraw, or at least not expand within.
Granting the FOEA such powers raises serious questions about the government’s commitment to its program with the IMF, which runs until December 2026
In fact, the law passed in July 2026 which designated the FOEA a presidency-affiliated institution widens the scope of activities in which the FOEA may invest, encompassing economic and service activities “of national strategic importance,” a flexible designation that could extend to virtually every sector of the economy.
From this angle, the law governing the FOEA appears to be a major step in the opposite direction of the government’s agreement with the IMF. Moving the authority out from under the Armed Forces might appear to give it a more civilian character and greater flexibility, but its direct affiliation with the president, coupled with its financial and administrative independence, reinforces its status as a sovereign economic entity.
The irony is that the law emphasizes “enhancing the role of the private sector,” and its director says that its operating model relies on partnerships with private sector companies. Yet having private sector partners does not mean that the competitive conditions in the market were intact. This raises crucial questions instead: How were these partners chosen? Were other investors given the same opportunity? How were the land, water, and infrastructure provided by the state valued? Who will bear the risks of financing and implementation?
This sovereign economic presence deepens the structural distortions that have ailed the economy for decades, most notably the state’s distributive role. It determines who enters the market, who accesses land and resources, and who receives government contracts. These are all legitimate roles, but in Egypt they are exercised without a broader governance framework, enabling corruption, particularly in the absence of institutional oversight. Moreover, this model creates a private sector that is dependent on government contracts. And with these contracts in Egypt concentrated in construction, private sector activity gravitates toward them at the expense of other areas, as evident in recent years.
In this practical sense, [the FOEA] is a supra-governmental body: it combines the functions of an investor, market regulator, landowner, and licensing authority
More critically, the FOEA does not enter the market as another state-owned company, but as a fully-integrated economic power. It participates in economic activity while simultaneously setting the general policies for its affiliated zones. In this practical sense, it is a supra-governmental body: it combines the functions of an investor, market regulator, landowner, and licensing authority. When these powers are concentrated in a single body directly affiliated with the presidency, in a country that suffers from clear imbalances of power among the branches of government, it can reshape Egypt’s economic landscape.
Additionally, the law does not require that the profits generated by the FOEA or its affiliated funds be automatically transferred to the state budget; instead, it makes that contingent on a subsequent presidential decree. Thus, the authority receives privileges and assets—land transferred to it at no cost, infrastructure funded by the state, exemption from fees—without the public treasury deriving any direct benefit.
When land, revenues, loans, and surpluses are held in FOEA and its affiliates, some areas of public activity would effectively disappear from the budget without the state actually withdrawing from the economy. At that point, the FOEA becomes a parallel economic structure, with the power to allocate and redistribute public resources outside the unified picture meant to reveal who bears the cost of development and who reaps its returns.
The old is not dead
None of the above means that the state should completely withdraw from economic activity. The problem is not the state’s participation, but the way in which it participates. Is it held accountable? Does it disclose the cost of its projects and contracts? Is it subject to the rules of competition? Or does it participate through an authority that operates outside all these frameworks, combining different, and sometimes contradictory, roles? In the latter case, the private sector does not become the engine of growth, as the government claims before the IMF, nor does the state become an instrument for serving public interest. Instead, a selective economy emerges, in which political power determines who accesses resources and opportunities, while society blindly bears the cost.
The old is not entirely dead, and the new has not been born in the form of institutional reform. Instead, what we face is a more concentrated version of the old state’s shortcomings, with greater power condensed in fewer institutions. Exceptions continue to expand, while the boundaries between public funds and political decision-making are blurred. That is why the question is not only the future of the FOEA, but the future of the state itself. Will it rebuild its public institutions? Or will it keep hollowing them out in favor of exceptional authorities whose expansion hinges on the persistent failure of the institutions they were created to replace?
Hassan el-Noamany is an Egyptian economic researcher.