EUR 1 bn down, EUR 4 bn to go: The first EUR 1 bn of a wider EUR 5 bn macro-financial assistance package arrived in the state coffers just before the New Year on 27 December, Prime Minister Moustafa Madbouly said in his weekly presser of the year. The newly arrived funds with the central bank will “accompany (Egypt’s) reform agenda,” European Commission President Ursula von der Leyen said last month after the EU approved the disbursement.

The funds will go towards alleviating external financing constraints, easing the government’s balance of payments and budget needs, and boosting FX reserves, which will in turn boost macroeconomic stability, competitiveness, improve the business environment, and support our green transition.

Remember: The total EUR 5 bn in concessional loans stems from a wider EUR 7.4 bnpackage of loans, grants, and investments through 2027 that was agreed to under a joint strategic and comprehensive partnership inked between the two sides back in March. In addition to the EUR 5 bn in macro-financial assistance, the EU pledged EUR 1.8 bn of “additional” investments under the Southern Neighborhood Economic and Investment Plan and EUR 600 mn in grants, including EUR 200 mn for migration management.

Madbouly was eager to highlight that the private sector have also been benefitting from soft financing facilitated by the government, with the amount of concessional financing going its way witnessing a significant upturn last year. The amount of soft financing that was organized by the Planning and International Cooperation Ministry and directed to the private sector rose some 45% y-o-y to USD 4.2 bn in 2024, the prime minister said.

The private sector has also increasingly been the source of investment in the country, with 63.5% of investment in the first quarter of the fiscal year originating from outside the state. The uptick in investment reflects not just the state reeling back its own investments, but also a 30% y-o-y jump in private sector growth, Madbouly argued.

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