Egypt aims to reduce debt ratio, extend debt maturity – FinMin

Egypt’s Finance Minister, Dr. Mohamed Maait, affirmed the country’s commitment to a comprehensive debt management strategy aimed at lowering the debt-to-GDP ratio to below 80% by 2027, according to a Cabinet statement published on Thursday.

“The strategy also includes extending the average debt maturity from 3.2 years in June 2023 to 4.5 or 5 years in June 2028 to alleviate debt service burdens and costs. This will be achieved by reducing short-term issuances and transitioning to medium- and long-term issuances,” he said.

Maait emphasised the ministry’s efforts to gradually reduce the debt service bill over the medium term and diversify funding sources and instruments. The focus will be on increasing reliance on green bonds, instruments, and non-traditional low-cost tools such as Samurai and Panda bonds. He clarified that there are no plans for international market issuances until the end of the current fiscal year in June 2025.

Speaking on the sidelines of the IMF and World Bank Spring Meetings in Washington, Maait highlighted the timely fulfillment of all obligations at their due dates and under the same issuance terms without any changes. He explained that recent and expected cash flows associated with the IMF-supported economic reform programme are helping to ease financing pressures and reduce the need for quick financing.

The minister noted that the success of the “Ras El Hekma” deal reflected the Egyptian economy’s ability to attract further investment inflows. Additionally, half of the proceeds from the “Initial Public Offerings” programme will be directed towards directly reducing government debt and improving the country’s public finance indicators.