New public debt strategy set for December release: The Finance Ministry is planning to unveil its new public debt strategy this December, Finance Minister Ahmed Kouchouk told representatives from JP Morgan, Morgan Stanley, and Goldman Sachs in Washington, according to a ministry statement.

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The announcement confirms what we reported in July about the upcoming strategy for 2025-2030, which will feature social and sustainability bond issuances. Originally slated for release at the start of this year, the strategy was postponed due to “disruptions in the interest rate market and difficulty forecasting the impact of previous tensions on bond markets,” a source told EnterpriseAM at the time.

The broad strokes: The Finance Ministry aims to bring public debt down to below 75% of GDP within three years, from 85% in the last fiscal year, while cutting debt servicing costs to 7% of GDP and extending debt maturity to five years.

How are we going to get there? The strategy will employ several mechanisms, including debt-for-investment swaps modeled after the Ras El Hikma agreement — converting a significant portion of regional and international deposits into investments — alongside increased concessional financing from financial institutions.

That’s not all: At least half of the USD 1.25-1.5 bn in proceeds the state is targeting from offering up stakes in four state-owned companies by June will go toward reducing government debt, which will help support the government’s efforts to reduce debt by 10% of GDP over two years.

By the numbers: The Finance Ministry reduced the state’s external debt by USD 4 bn over the past two fiscal years, while domestic debt fell by 10% during the same period, according to a document seen by EnterpriseAM. The debt-to-GDP ratio reached 11% (EGP 1.9 tn) by the end of FY 2024-2025, up from 9.8% (EGP 1.3 tn) in the fiscal year prior. Debt accounted for 49.4% of total public spending last fiscal year, according to the document.

REMEMBER- Egypt returned to the international debt market earlier this month, with a USD 1.5 bn sukuk offering, which received USD 9 bn in subscription requests. The issuance stands as Egypt’s third-ever sovereign sukuk issuance and the fiscal year’s first, following June’s USD 1 bn sovereign sukuk issuance, which was fully subscribed by Kuwait Finance House, and our maiden sukuk issuance back in 2023.

More to come: The ministry is also planning two more international issuances this year. One will be a conventional issuance, while the other could either be a labeled bond — think green, blue, or sustainability bond — or an issuance in a foreign market, like a Panda or a Samurai bond. Total issuances for the year will total USD 4 bn — just like last year.

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