Our 2024 debt burden just got higher: New central bank projections (pdf) out on Thursday see us spending at least USD 42.3 bn on foreign debt repayments in 2024.

Long, medium term debt rise: Egypt will have to pay some USD 32.8 bn — 20% of our total external debt — to fulfill medium and long-term debt obligations in 2024. This marks a USD 3.6 bn increase from the bank’s September estimates, which put our medium and long-debt repayments at USD 29.2 bn for next year.

What’s our short-term debt service looking like? Egypt will have to repay an additional USD 9.5 bnin short-term debt obligations during the first half of 2024. The largest chunk of the payment is scheduled for February and March. Short-term debt payment projections don’t extend beyond June.

Total external debt inches down: By the end of the fiscal year 2022-2023, Egypt’s total external debt sat at USD 164.7 bn, down from USD 165.4 bn in March 2023, but still about USD 9 bn higher from the figure recorded at the end of the fiscal year 2021-2022.

Remember: Egypt’s external debt has quadrupled over the past decade, reaching a record high of USD 165.4 bn at the end of March due to increased borrowing from multilateral lenders and international debt markets. This equates to around 40.3% of GDP, below the IMF’s 50% threshold for manageable debt levels, according to the report. More than two-thirds of the country’s external debt is denominated in USD.

TOOLS TO HELP US MANAGE-

#1- GCC deposits:

  • UAE has renewed a USD 1 bn deposit that matured in July 2023 to be now due in July 2026, the report shows. The UAE has USD 5.7 bn in total deposited at the CBE.
  • Kuwait has renewed a 2 USD bn deposit that matured in April 2023 to now be due in April 2024, according to the report. Kuwait has USD 4 bn in total deposited at the CBE. A local report suggested last month that Kuwait also renewed the other USD 2 bn deposit to be due in September 2024 — this was not reflected in the CBE report, which tracks data until 1 July 2023.
  • Another USD 5 bn could be coming our way from UAE and Saudi, according to unconfirmed reports out in October, although this could also refer to a rollover of maturing portions of existing deposits.

#2- Larger IMF program: The IMF is “seriously considering” increasing our USD 3 bn loan program as the conflict in Gaza poses difficulties for the country, with Egypt reportedly in talks to raise the program to USD 5 bn.

#3- More FDI + state asset sales: The government wants to raise FDI of USD 12 bn in the current fiscal year, almost half of which is expected to come from the state privatization program, which is expected to raise around USD 5 bn until the end of June 2024. The program now includes 35 state-owned companies and the list could see newcomers in the coming months.

#4- Softer loans: Egypt is looking to secure USD 3 bn by the end of the current fiscal year through bond issuances and international loans. We already halfway through our target after securing USD 500 mn from Deutsche Bank and the Arab Banking Corporation, USD 500 mn from a samurai bond issuance in November, and USD 478.7 mn from our maiden panda bond issuance in October.

#5- Tourism revenues: The country is on track to reach USD 14 bn of tourism revenues in 2023, a rise of nearly 15% compared to 2022. The Tourism Ministry is planning to increase that figure by another 25% next year.

#6- Initiatives to bring in FX: Recent government initiatives to drum up FX include allowing expats to import cars in return for depositing fees in FX and settle any outstanding military service for USD / EUR 5k. The government also introduced a program allowing foreigners and Egyptians abroad to buy real estate in FX, while a separate program offers investors generous tax breaks if they use hard currency to fund at least half of the investment cost of industrial projects.

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