Factbox: All you need to know about key CBE figures on Egypt payments balance

Rana Salem , Tuesday 20 Aug 2024

Egypt’s overall balance of payments registered a surplus of $ 4.1 billion in the July-March period of the 2023/2024 fiscal year, from a $ 281.9 million surplus a year earlier, the Central Bank of Egypt said on Tuesday.

The improvement was driven by a net capital and financial account inflow of $20 billion, compared with $8.1 billion in the same period of the previous fiscal year, the CBE pointed out.

Trade deficit

However, the current account deficit widened to $17.1 billion from $5.3 billion.

This was driven by a 22.3 percent surge in the trade deficit to $28.8 billion, from $ 23.6 billion in the previous year.

Trade volume fell 10.1 percent to $ 77 billion, equivalent to 19.1 percent of GDP.

The trade deficit expanded by $ 5.3 billion to $ 28.8 billion, compared to $ 23.6 billion in the previous fiscal year, representing 7.1% of GDP.

Courtesy of CBE.

Egypt's trade deficit widened in the quarter as merchandise exports slumped 22.3 percent to $ 24.1 billion, central bank data showed.

Oil exports plummeted 60.8 percent to $ 4.6 billion, accounting for 19 percent of total exports, while non-oil exports edged up 1.1% to $19.4 billion or 80.9 percent.

This pushed the export-to-import ratio down to 45.6 percent from 36.9 percent.

Merchandise imports also fell 3.1 percent to $ 52.9 billion, with both oil and non-oil imports declining by 4 percent and 2.9 percent, respectively, according to the CBE.

The Egyptian government has an ambitious plan to increase the country’s exports to $ 130 billion over the next three fiscal years.

Foreign Direct Investments (FDIs)

Meanwhile, FDI in the non-oil sector recorded a net inflow of $US23.9 billion compared to the previous year at $8.9 billion which was mainly caused by the inflow of $15 billion in the period from January to March 2024 from the Ras El Hekma deal.

According to the CBE, foreign direct investment (FDI) in Egypt's non-oil sector surged to $ 23.9 billion in the past year, up from $8.9bn previously.

This significant increase was largely driven by a $15 billion inflow recorded between January and March 2024 following the signing of the $ 35 billion Ras El-Hekma deal.

Ramy Amin, co-founder and managing director of UAE-based Freezoner, says Egypt's decision to unify its currency exchange rate in March is expected to attract further FDIs.

In the field of green hydrogen and renewable energy, Egypt has signed several deals worth millions of dollars.

In December, the government inked a deal with Saudi Arabia's ACWA Power to establish a green hydrogen project in the Suez Canal Economic Zone (SCZONE) at a cost of more than $4 billion.

In February, the government also signed seven memoranda of understanding worth a combined $ 41 billion with global developers to launch green projects.

On the other hand, FDIs in the oil sector increased from $ 4.2 billion in the previous year to $ 4.4 billion.

Energy company British Petroleum (BP) announced plans in August 2023 to invest $ 3.5 billion in Egyptian exploration and natural gas development over the next three years.

Additionally, portfolio investments recorded a net inflow of $ 14.6 billion compared to an outflow of $ 3.4 billion in the previous year.

The Egyptian government aims to increase private investment to 60-65 percent of total investment and boost the annual growth rate of FDI to around 14 percent by 2030.

External Debt

Egypt's external debt decreased by 2.5 percent to $ 160.6 billion by the end of March, compared to the level recorded by the end of June 2023.

The decline was mainly due to a $3.8 billion drop in net loan and facility disbursements, as well as a $0.3 billion decrease in book value caused by the US dollar's appreciation against other borrowing currencies, according to the CBE statement.

Courtesy of CBE.

Egypt plans to use 50 percent of its initial public offering (IPO) proceeds to reduce its debt level.

The country's debt fell by 7 percent in the 2023/24 fiscal year to 89 percent, from the previous year.

Rationalizing public spending and reducing total debt are key goals of the new government program.

Remittances

Egyptian workers' remittances dropped 17.1 percent to $ 14.5 billion compared to $ 17.5 billion in the previous year.

The decline followed a 22-month slump before remittances rose 11.1 percent year-on-year in March, the first increase since the devaluation of the Egyptian pound on 6 March.