Cabinet approved EgyptianOn Wednesday, a draft resolution was approved to reconstitute the “Committee for Managing the Debt File and Regulating External Borrowing,” headed by the Prime Minister, with membership of the Governor of the Central Bank, the Minister of Planning and International Cooperation as rapporteur of the committee, the Minister of Finance, and the Minister of Investment and Foreign Trade, in addition to representatives of The General Intelligence Service and the Administrative Oversight Authority.
The decision tasks the committee with managing the external debt file in an integrated manner that includes all its tools, and setting an annual ceiling for external borrowing based on financial sustainability standards, while not exceeding it except in cases of extreme necessity and with the approval of the Council of Ministers.
The committee is studying the options available to bridge the financing gap in foreign currencies from external sources, and determining the amount of external borrowing required from various financing sources, not to exceed the specified external debt ceiling.
The committee is also committed to implementing a strict governance system to regulate the use of all external debt instruments, within an integrated institutional framework, similar to the system in place for soft development loans.
In the same context, the draft resolution clarified that ministries, government agencies, and all public entities wishing to finance any project must notify the Ministry of Planning and International Cooperation in advance.
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The Ministry is exclusively responsible for preparing a periodic classification that determines the priorities of projects, to be presented to the committee. The decision also set conditions for signing foreign loans, including the necessity of obtaining the approval of the committee for any project that requires borrowing from abroad, before presenting it to the Prime Minister or the Presidency of the Republic, while determining priorities for projects that require foreign loans.
The decision also stipulated the requirement to obtain the committee’s approval before contracting with foreign or local companies to implement projects that require a foreign component, along with preparing a comprehensive development feasibility study that clarifies the entity’s ability to repay the loan.
The conditions stressed that external borrowing for projects must be limited to financing the foreign component that is not available locally, except in necessary cases approved by the committee.
The decision gave priority to financing strategic needs in light of emergency economic conditions, provided that these conditions are reviewed every three months, with a focus on development loans that enhance liquidity and reduce the dollar gap, provided that they are concessional, with long repayment terms and appropriate grace periods.
The draft resolution stipulated a mechanism for submitting applications for external loans through a system prepared by the Ministry of Planning. The committee includes a technical secretariat headed by the committee’s rapporteur and includes representatives of ministries and member agencies, in addition to a representative of the General Secretariat of the Council of Ministers.
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The Technical Secretariat has the possibility of seeking the assistance of relevant ministries or authorities when needed, and it is also responsible for preparing a quarterly report that addresses the position of external debt, its indicators, sustainability, and the cost of its interests, to be presented to the committee and the Council of Ministers.
It should be noted that Egypt’s total external debt amounted to about $152.88 billion at the end of last June, compared to about $168.03 billion at the end of December 2023, after receiving support in February 2024 through a record deal worth $35 billion with… The UAEIt included the sale of land development rights in the Ras El Hekma area on the Mediterranean.
It has doubled Debts The Ministry of Foreign Affairs of Egypt has paid four times since 2015, as a result of large spending on building the new administrative capital, developing infrastructure, purchasing weapons, and supporting the local currency. And last March.
Subsequently, Egypt concluded a new support agreement with the International Monetary Fund, worth $8 billion, aimed at enhancing the flexibility of the pound’s exchange rate against the dollar, with loan payments to be disbursed semi-annually until September 2026.
