In the current period, the government has nothing to do except investment, reducing foreign debt, and increasing the state’s revenues from dollar income. I wonder how the government will move on this file. When will Egypt reach zero foreign debt?
From the beginning of the presidential term of President Abdel Fattah El-Sisi, he issued his directives to the government on the necessity of maximizing state revenues, encouraging investment, reducing imports, reducing the consumption of foreign currencies in investment operations, encouraging local production and relying on it as an alternative to imports, and also raising its efficiency so that it is at the level of importer, so that we can begin to export it abroad so that we can visit… The export invoice to Egypt, which of course will be in dollars.
Ok, what is the government doing in the foreign debt file?
Prime Minister Dr. Mostafa Madbouly said that the government received direct assignments from President Abdel Fattah El-Sisi, President of the Republic, to implement an integrated plan to control revenues and expenditures, ensure the sustainability of public finances, and avoid financial deficits.
President Sisi’s assignments to the government began to be translated into reality on the ground, and in fact the Prime Minister held an urgent meeting with the Committee for Managing External Debt and Regulating Borrowing, which includes Hassan Abdullah, Governor of the Central Bank, Rania Al-Mashat, Minister of Planning, Economic Development and International Cooperation, Ahmed Kjouk, Minister of Finance, and Hassan Al-Khatib, Minister of Investment and Foreign Trade, to discuss the strategy for reducing the downward trend of foreign debt.
Dr. Mostafa Madbouly spoke and said that the committee is continuing to achieve the goals of sustaining the downward trend of external debt, and this is after the great success achieved by the Egyptian state in the past year, and the decline in debt levels in terms of the gross domestic product.
In order to understand the issue, we must know that the powers of the External Debt Committee and the organization of borrowing are primarily based on managing the external debt file in an integrated manner, and setting a maximum limit for external borrowing annually, and this limit is determined according to financial sustainability standards.
The government’s program to reduce external debt, which was announced over a period of 3 years, aims to set a minimum for tax revenues and a maximum for the total budget sector debt, with the aim of reducing the total budget sector debt to less than 81% of the gross domestic product during the fiscal year 2026/2027.
The government’s plan also aims to achieve a primary surplus of 3.3% of the gross domestic product for the year 2026/2027. The government also decided to amend the financing and debt management strategy to reduce debt and overall financing needs. This will happen by improving the quality of financial financing, increasing the share of external budget financing sources and reducing the withdrawal account. Overdraft to the government in the Central Bank of Egypt gradually.
So, how does the External Debt and Borrowing Regulation Committee regulate obtaining the loan and on what basis does Egypt apply for loans?
Dr. Rania Al-Mashat, Minister of Planning, Economic Development and International Cooperation, said that the government is working with full force to achieve the goals of reducing debt levels in the gross domestic product, and this will be in parallel with working to pump new investments that ensure an increase in the rate of economic growth and the implementation of financial policies aimed at increasing domestic production and reducing financial burdens. And enhancing confidence in the Egyptian economy in the long term.
In order to reduce financial burdens, the government is currently working on improving economic indicators, which will reflect positively on attracting foreign and local investments. Financial stability and the noticeable improvement in economic performance will send positive signals to investors, and this will enhance the investment climate and stimulate the injection of investments in all sectors. This trend should continue. He urged the government to provide an encouraging and safe investment environment, stop borrowing, and begin the journey of bringing the debt down to zero, which is an easy goal that we can achieve with planning and time plans as we do. Countries were able to achieve zero debt.
