CAIRO — Even as the Egyptian military is expanding its business dealings in various sectors, the International Monetary Fund is warning that it's time for the government to pull back its reach and allow the private sector room to grow.

The most recent expansion comes this week in the lucrative field of extracting minerals from black sand — an industry expected to generate billions of dollars. The military-affiliated Egyptian Black Sand Company (EBSC) signed a memorandum of understanding with a leading Chinese company Weiyuan Minerals on June 18 in a bid to boost EBSC efficiency in extraction.

The IMF has warned the government — and not for the first time — that military businesses pose unfair competition to the private sector. The military owns several companies in the sectors of supply commodities, agricultural reclamation, fish farming, livestock and construction. Some Egyptian media outlets and economists have also accused the state of favoring these businesses, which are exempt from customs and taxes. Their employees are compulsory recruits who receive a pittance as salaries, without any health or social insurance.

Subir Lall, the head of the IMF mission to Egypt, told Al-Monitor that although Egypt's military economic activities "aren't particularly in contradiction with the IMF policy," it's up to the state to establish a "fast-growing economy whose main pillar [ought to be] the private sector rather than the public sector or the state.”