Jordan hatches JD1 billion privatisation programme
October's flotation of Jordan Telecom will be the start of a programme designed to enrich Jordan's public coffers.
Jordan’s Minister of Finance hopes that privatisation will bring around JD1 billion into the public coffers over the next three to four years. In an interview with Arabian Business magazine, Michael Marto said that a long term privatisation programme will kick off in October with the selloff of up to 15% of Jordan Telecom, to be followed by phosphate, potash and energy companies.
“Our target for the coming three to four years is to raise around JD1 billion,” said Marto. “This year and next year alone, we should do 4-500 million.”
The Minister hopes that the privatisation programme will help Jordan achieve economic growth of 5% annually “sometime soon” and of 6% annually in the longer term. “If we keep going at 5-6%, we will see a transformation of the economy and that will build on itself,” said Marto.
Whilst not at any point committing to a pledge of 5-6% annual growth, the Minister argues that crucial economic reforms have been undertaken. Spending and debt are being brought under control, he claims, and expensive subsidies on staples such as petrol and electricity phased out. The Paris Club has also recently agreed to extend repayment terms on around $3.8 billion of debt.
Marto also argues that Jordan’s stock market will be able to absorb a major IPO like JTC and others that may follow. He believes that the JTC flotation will encourage the idea of share ownership amongst ordinary Jordanians, unlocking deposits sitting in local and overseas banks.
“Once investors see this IPO clearly, the pricing, the prospects of the company, this will become something they want to invest their money in,” said Marto. “I have no doubt this will be a successful IPO.”