Egypt: 12% increase in net debt issuances in the first half

In light of the continued military regime in Egypt adopting the policy of external borrowing, the “Trade and Development” report issued by the United Nations Conference on Trade and Development (UNCTAD) warned against the inability of Egypt and developing countries to pay their debts after they reached record levels in previous years.

The report warned that a very high level of debt of developing countries reflects a weak ability to pay in the future, and a high possibility of default.

High government debt issuances

Egyptian government debt issuances increased about 12 percent in the first half of the 2019-2020 fiscal year to 513 billion pounds ($ 32.7 billion), exceeding 70 percent of the target for the whole year, compared to 460.1 billion a year earlier.

A semi-annual report to the Egyptian Ministry of Finance showed that bonds worth 422.6 billion pounds were issued in the first half of the current fiscal year, which ended on December 31, compared to 323.6 billion pounds a year ago, an increase of 31 percent, while treasury bills worth 90.4 billion pounds were issued Compared to 136.5 billion a year ago, down 34 percent.

The high burden of loan interest payments contributed to raising Egypt‘s budget deficit during the same period to 3.8%, and the government expected to increase local borrowing in the 2019-2020 budget by 45 percent to 725.156 billion pounds.

The Central Bank of Egypt had stated, in a previous report, that the burdens of external debt service increased to about 13.4 billion dollars during the fiscal year 2018/2019, compared to about 13.25 billion in the previous year, and distributed between about 10.2 billion dollars in installments, and about 3.2 billion Paid benefits.

The total external public debt due on Egypt, as of the end of last September, was 109.363 billion dollars, a growth of 17.47 percent on an annual basis.

Long-term debt

The external debt due on Egypt falls by 89.9% in the longterm debt category, which exceeds the original maturity period of more than 12 months, and its value is $ 98.33 billion, and the rest is worth $ 11.034 billion in short-term debt (the original maturity period is less than 12 months)

The external debt of Egypt was distributed at the end of the third quarter, at $ 58.863 billion due from the government, $ 27.684 billion from the Central Bank of Egypt, $ 9.2 billion from banks other than the Central Bank, and $ 13.616 billion from other sectors

Egypt: 12% increase in net debt issuances in the first half

The International Monetary Fund expects that the value of Egypt‘s external debt in the current fiscal year (June 2020) will reach 109.7 billion dollars, to reach 111 billion dollars during the fiscal year 2021-2022.

The volume of bank loans to the government is 484 billion pounds

In January, the Central Bank of Egypt announced that the volume of loans granted to the government from Egyptian banks amounted to 484 billion pounds, of which 241.1 billion pounds in the local currency and 243.2 billion pounds in foreign currency.

Total non-governmental loans also increased to 1.329 trillion pounds, of which 106.5 billion pounds are in the local currency.

He also pointed out that the total loan balances provided to bank customers other than the central bank rose last October by about 6 billion pounds to reach 1.813 trillion pounds compared to 1.807 trillion pounds in the previous September.

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