Part of the weekly cabinet meeting, headed by Prime Minister Mostafa Madbouly. Photo courtesy of Egyptian cabinet.
Madbouly emphasized that repaying this significant debt posed a challenge for the state but affirmed Egypt's commitment to meeting its financial obligations, noting that the country has never defaulted on these payments.
He also stated that the debt due in the coming year will be lower than the amount repaid in 2024.
According to the IMF, Egypt's overall debt has decreased by around 7 percent in the 2023/2024 fiscal year, dropping to 89 percent of GDP, compared to 95.7 percent in the previous fiscal year (2022/2023).
The government targets reducing the external debt-to-GDP ratio to about 88 percent in FY2024/2025.
Moreover, Egypt is committed to reducing its high debt levels to below 80 percent of the GDP by FY2026/2027 as part of its $8 billion loan programme with the International Monetary Fund (IMF), which is set to conclude in September 2026.
Export Arrears Settlement
Similarly, the cabinet approved a new mechanism for settling overdue payments owed to exporting companies by the Export Development Fund.
This decision aligns with President Abdel-Fattah El-Sisi's directives and is part of the government's ongoing efforts to resolve outstanding arrears.
Since 2019, the government has successfully disbursed nearly EGP 70 billion to around 2,500 exporting companies.
The newly approved mechanism will focus on settling the remaining arrears, estimated at EGP 60 billion. The plan offers flexibility, allowing companies to choose from different payment options based on their financial circumstances and capabilities.
The first phase of the mechanism will begin by settling between 40 percent and 50 percent of the total overdue amount. This initiative aims further to strengthen the competitiveness of Egypt's export sector and ensure financial stability for exporters.
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