Egypt's parliament to discuss draft law on sovereign bonds (Sukuk) Sunday

Gamal Essam El-Din , Saturday 5 Jun 2021

The law will allow the Finance Ministry to issue Islamic sharia-compliant bonds necessary to raise capital for spending on development projects

A file photo of Egypt's Parliament (Photo: Reuters)

Egypt's parliament, the House of Representatives, will on Sunday discuss a government draft law on issuing sovereign bonds (Sukuk) that is aimed at shoring up the state's financial performance and covering the budget deficit.

The law will allow the Ministry of Finance to issue Sukuk to raise capital necessary for spending on economic and investment projects targeted by the state budget and development plan, a report prepared by the House's budget and economic affairs committees said.

The Sukuk, which is sharia law compliant and dominant in most Islamic countries, will be a fourth source of finance, along with treasury bills, domestic loans and credit facilities, and foreign loans and credit facilities, the report said.

Sukuk are almost non-existent on the Egyptian market, and Egypt has a friendly economic environment that allows it to tap this investment instrument, the report said.

The parliament will also debate on Sunday two other bills, which give the minister of petroleum and mineral wealth a permit to ink two deals with British Petroleum (PB) and the National Egyptian Company on prospecting for oil in the Suez Gulf.

On Monday, the House will discuss an agreement with the United States on achieving comprehensive economic governance.

It will also debate another two agreements with the African Development Bank on implementing integrated sanitary drainage systems in rural areas in Upper Egypt governorates.

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