FinMin caps sovereign guarantees at EGP 560 bn

Good morning, wonderful people. Local banks are lining up to absorb excess EGP liquidity in the market as the currency edges closer to the 54 mark against the greenback, rolling out high-yield certificates to anchor local-currency liquidity and keep it from flowing into foreign currency.

We are also breaking down the sweeping changes to our competition law, which got the final nod from the House late last month. Dubbed the “economic constitution,” these amendments aim to level the playing field between private and state-owned entities while nearly tripling the financial thresholds that trigger mandatory M&A reviews.

IN MEMORIAM- Banque Misr Deputy CEO Amr El Nokaly died in a car accident on Thursday. El Nokaly had only recently taken on the role of deputy CEO at Banque Misr, where he was also named executive board member. Amr joined Banque Misr after distinguished runs at both Bank ABC in Bahrain and Mashreq Bank in the UAE.

A career banker with more than 25 years in the industry across three continents, tributes from former colleagues describe him as “a respected leader and valued colleague” whose “contributions, professionalism, and character left a lasting impression.” For those of us at EnterpriseAM who knew him, we couldn’t agree more with Banque Misr’s words that his “kind impact will remain in the hearts of all who knew him and worked with him.” Our deepest condolences to Amr’s family and to everyone privileged to have counted him as a friend.

Clawing back credit

The Finance Ministry is bringing down contingent liabilities, cutting the cap for government guarantees to EGP 560 bn for FY 2026/27 — a big step down from the current EGP 740 bn, according to budget documents seen by EnterpriseAM. The goal is to reduce the guarantees-to-GDP ratio to 28.1%, down from 29.8% in the current fiscal year, and keep total financing needs at 9-11% of GDP over the next three years.

The bigger picture: The new roadmap also puts a hard ceiling of EGP 19.1 tn (or 78.1% of GDP) on public debt for budget sector entities. This will require any new sovereign guarantees to get the green light directly from the Cabinet every year.

Why it matters: This is another move on the “ reducing sovereign stress ” chessboard. The government is taking IMF warnings seriously that the country’s EGP 5.4 tn in publicly backed debt is high risk for sovereign stress, and the new ceiling is designed to “govern the guarantees system and limit it to only necessary projects,” a government official tells EnterpriseAM. This is the latest step in the government’s multi-year plan to fix its borrowing habits while giving the private sector more space in the local debt market.

REMEMBER- The ministry is cleaning up the existing mess first, more than doubling capital injections into indebted state-owned enterprises and economic authorities up to EGP 125.3 bn, taking equity stakes in debt-for-equity swaps that retire sovereign-backed liabilities and close the chapter on the heavy borrowing spree that fueled the country’s recent infrastructure buildout.

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Rock solid reform

The state is getting serious about promoting the mining sector, delivering fresh incentives to lure in investors. Amendments to the Mineral Resources Law will cover rental prices, the approvals process for concessions, and the share in joint projects that the Mineral Resources and Mining Industries Authority (EMRA) holds, according to an Oil Ministry statement.

The amendments will include:

• Rents on exploration areas drop by up to 60%;
• Approvals granted within 30 days — allowing companies to explore multiple ores in one concession;
• Slash EMRA’s share in joint projects down to 10% from a current 25% share.

Why this matters: The government wants to boost the mining industry’s contribution to GDP to 5-6% by 2030, up from a mere 1% currently. Attracting private investment — and a lot of it — is the only way they are going to get close to these targets. Lower costs, faster approvals, and more flexible concession terms are expected to make the sector more attractive to investors, but the proof will be whether these reforms translate into new exploration activity and private investment.

Clearing the books

The government settled its final USD 20 mn payment to the UAE’s Dana Gas, according to a company statement (pdf). The government has now effectively closed out its overdue receivables, paying the natural gas firm USD 50 mn in late 2025 as part of its broader push to clear arrears owed to foreign oil and gas companies.

The payoff coincides with a return to operational growth. Dana Gas’ Egypt production rose 4% y-o-y in 1Q 2026 to 13.1k boepd, marking the first increase in years after natural decline. After receiving its dues from the government, the company now can push ahead with its USD 100 mn investment program in the Nile Delta, including the drilling of 11 new wells, and is expected to add 80 bn cbf of gas reserves.

In numbers: As of the end of April, the Oil Ministry has driven down the total arrears owed to foreign companies to around USD 714 mn, down from USD 6.1 bn in June 2024, according to a ministry statement. Prime Minister Mostafa Madbouly recently announced the government will have fully settled all the arrears owed to international oil companies by the end of June.

Data point

USD 29.4 bn — that’s how much Egyptians abroad sent home in the first eight months of FY 2025/2026, a 28% y-o-y increase, according to recent CBE data for February — the final full month of stability before the outbreak of the US-Israel war on Iran. February alone saw a 25.7% m-o-m increase to USD 3.8 bn, capping off a blockbuster calendar year 2025 that saw total transfers hit an all-time high of USD 41.5 bn.

Why it matters: Record remittances and USD 52.8 bn in net foreign reserves have given the country its strongest liquidity buffer in history. This unprecedented expatriate support acts as a critical shock absorber against the recent flight of hot money. It also proves that the current flexible exchange rate regime can absorb regional shocks without the risk of a systemic liquidity freeze.

PSA

WEATHER- Better keep an umbrella handy — the Egyptian Meteorological Authority expects a cool, rainy day ahead and for the mercury to dip up to 7 degrees in the capital. Cairo is in for a high of 26°C and a low of 14°C, according to our favorite weather app.

It’s even cooler with possible showers in Alexandria, with a high of 20°C and a low of 15°C.

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The big story abroad

Berkshire Hathaway’s first post-Buffett annual meeting is dominating the business pages this morning. During the meeting, CEO Greg Abel sought to reassure shareholders wary of a post-Warren Buffett era. Abel pledged not to break up the conglomerate and to eliminate bureaucratic hurdles. The firm’s whopping USD 380 bn portfolio of liquid capital means that Berkshire will not be “beholden to anyone,” Abel said.

Abel urges shareholders to be patient: The new CEO said that he was “not anxious to deploy capital into subpar [prospects]” and that he will make “significant” investments in assets when it is most opportune. He also highlighted that the firm is uniquely positioned to capitalize on the tech sector’s expansion through its ownership of the utility infrastructure essential for powering data centers.

Shareholders seem happy. Veteran attendees of the annual meeting largely agreed that he has proven his capability, leaving the event mostly reassured by the transfer of power from Buffett to Abel.

MEANWHILE- In the unending US-Iran diplomatic saga, Tehran has communicated theconcept for a new peace proposal to President Donald Trump, who will wait for the exact wording of the agreement before committing. Trump also clarified that the option to resume military strikes remains on the table should Tehran “misbehave.”

To fortify its Middle East allies against future Iran strikes, Washington aims to expedite a USD 8.6 bn arms contract by invoking emergency powers and bypassing Congressional review. Under the agreement, the UAE, Qatar, and Israel would obtain defense capabilities aimed at intercepting missiles.