The debt is funded by current financing rather than investments, an issue in need of solutions, El-Gebaly added. Egypt has a resource gap due to low savings and investment rates, he said during the National Dialogue session on public debt on Tuesday.

El-Gebaly asked about drafting a law to cap public debt, or possibly rescheduling repayment.

Parliamentary Planning and Budget Committee Deputy Yasser Omar said the debt issue requires drastic action, as it weighs heavily on the budget.

During the public debt session, Omar stressed the need for drastic action to curb corruption and ensure transparent governance as a means of reducing the debt.

He added that closing the budget deficit without borrowing is currently impossible.

Omar added the budget deficit must be reduced according to quantitative targets, by cutting expenditures, activating state-owned assets, raising revenues, improving state asset efficiency, and restructuring wages.

Legislation on a public debt ceiling and tax evasion should also be revisited, he added.

National Dialogue Technical Secretariat Head Mahmoud Fawzy questioned the feasibility of a public debt ceiling law, saying borrowing states do so out of necessity, not luxury.

Mohamed Maher, an advisor to the President of the Free Egyptians Party, called for external debt restructuring to allow long-term borrowing and short-term repayment.

Senate member Muhammad Farid said the public debt crisis is a symptom, rather than the disease itself.

The real issue is the crowding-out effect of state enterprises on the private sector, creating an unbalanced economic structure and a downturn in the non-oil private sector, requiring more unhealthy intervention and debt, argued Farid.

Egypt's external debt increased by 4.8 percent to $165.3 billion in Q3 of FY 2022/23, up from $157.8 billion in Q3 of the previous year.

The government debt-to-GDP ratio is expected to reach 97 percent at the end of June 2023, according to Minister of Finance Mohamed Maait.

The country seeks to tackle the US dollar shortage from which it has been suffering for almost a year and a half to bridge an estimated $17 billion financing gap until 2026.