Egypt committed to tame debt level to below 80% by 2027: Finance minister to IMF

Doaa A.Moneim , Thursday 18 Apr 2024

Egypt is committed to reducing the debt-to-GDP ratio to below 80 percent by 2027 through a series of integrated measures, Minister of Finance Mohamed Maait stated.

Finance minister
Finance minister to IMF


Maait made his statements on the sidelines of the annual meetings (Spring Meetings) held by the World Bank Group and the International Monetary Fund (IMF) in Washington.

He was speaking during a discussion panel held with Jihad Azour, the director of the Middle East and Central Asia Department at the IMF.

“Key among these is the extension of the average debt maturity from 3.2 years in June 2023 to 4.5 or five years by June 2028. This move aims to alleviate the burden and cost of debt service by reducing short-term issuances and increasing the proportion of medium and long-term bonds,” Maait explained.

The minister also stated that Egypt intends to diversify its sources of financing and explore alternative instruments with lower costs, such as green bonds, sukuk (Islamic bonds), and unconventional options like Samurai and Panda bonds.

“This strategic shift will contribute to gradually reducing the debt service bill over the medium term while enhancing financial resilience,” according to Maait.

He underscored that there are no immediate plans for international market issuance until the conclusion of the current FY2023/2024 in June.

He also affirmed the government's commitment to honouring all obligations on time and maintaining consistent issuance conditions, ensuring stability, and reliability for investors.

The minister highlighted the positive impact of recent and anticipated cash flows resulting from the IMF-supported economic reform programme.

“These inflows have helped alleviate financing pressures and reduced the reliance on short-term financing options,” said Maait.

He also emphasized that the success of the Ras Al-Hekma deal reflects Egypt's ability to attract increased investment and diversify funding sources.

According to the minister, the government has directed 50 percent of the revenues generated from the initial public offering (IPO) programme towards directly reducing government debt.

“This strategic allocation aims to improve the state's overall public finance indicators and enhance economic stability,” Maait pointed out.

The minister said that Egypt's proactive approach to debt management and commitment to financial stability will play a pivotal role in strengthening the country's economic resilience.

By implementing these measures, Egypt aims to create a favourable environment for sustainable growth, attract investment inflows, and achieve long-term economic prosperity, according to Maait.

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