The government has a new and ambitious FX inflows target for 2030: The Madbouly government aims to ramp up its foreign exchange inflows to around USD 300 bn a year by 2030 — nearly triple the country’s current annual FX revenues — to boost the economy’s resilience. The new target came in a report (pdf) from the Cabinet Information and Decision Support Center (IDSC) that outlines the government’s economic strategy for President Abdel Fattah El Sisi’s third term beginning, which starts in April.

The game plan for 2030:

  • Growing exports by at least 20% each year to reach USD 145 bn.
  • Raising tourism revenues by 20% annually to USD 45 bn.
  • Increasing remittances from Egyptians abroad by 10% annually to USD 53 bn.
  • Increasing foreign direct investments (FDI) — including investment in real estate — by 10% annually to USD 19 bn.
  • Boosting Suez Canal revenues — including revenues from maritime services —by 10% annually to USD 26 bn.
  • Ramping up outsourcing revenues by 10% annually to USD 13 bn.

Big securitization plans: The government wants to raise between USD 1.4-10.1 bn USD annually starting this year and until 2030 by securitizing 20-25% of its USD revenues. Three potential scenarios have been drawn up that will see the government offer securitized bonds to investment banks and international investors, according to the report, without disclosing what these scenarios are. The securitization plan is one of several “urgent priorities” for the short term aimed at shoring up FX revenues.

Converting 38% of external debt into FDI: The government plans to form a ministerial committee to negotiate with a number of creditor countries and banks to swap public debt for stakes in some state-owned companies, as part of the state ownership policy, with the aim of converting 38% of Egypt's external debt to investments.

Real estate = a promising source of FX: The state aims to raise USD 2-3 bn in FX receipts through the sale of real estate units by setting up a company dedicated to leasing and selling properties in foreign currency. The plan will see the government selling properties to foreign investors in exchange for five-year residence permits — a proposal we first heard about when we talked to House Housing Committee Undersecretary Amin Massoud last month.

Efforts to drum up FX from Egyptian expats: The state will set up an investment fund with a capital of USD 1 bn that will offer “diversified securities” to Egyptian expats. The fund will manage a portfolio of state-owned assets and will be run by an unspecified “fund manager with distinguished international experience.” The state will also set up a separate USD 1 bn company to invest the savings of expats in a number of “priority” industrial and service sectors.

An optimistic look at the EGP’s future: The report cites projections from the International Monetary Fund (IMF) that see the USD changing hands at an average of EGP 36.83 from 2024 through 2028. Authorities will continue to work towards a flexible exchange rate regime to close the gap between the official USD-EGP exchange rate and the parallel market rate to improve the economy’s resistance to external shocks, the report reads.

Longer bond maturities on the horizon: The report sees the government issuing bonds with tenors of 20-30 years to service external debt due in the current fiscal year and the next in a bid to extend its debt profile beyond short-term borrowing and to improve debt sustainability.

What’s next? The report will go to the National Dialogue within the coming two months for discussion, cabinet spokesperson Mohamed El Homsani told Ala Masouleety’s Ahmed Moussa (Watch, runtime: 3:52).

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