FinMin borrowed around EGP 4.3 tn at home in four months, almost all of it refinancing

The government borrowed about EGP 4.3 tn from the domestic market in the first four months of FY 2026/27, funding the year almost entirely at home. The monthly split runs EGP 967 bn in July, 969 bn in August, 1.3 tn in September, and 1.08 tn in October, according to an official document seen by EnterpriseAM.

Almost all of it is refinancing rather than new money. The ministry issues mostly short paper: bills made up 85% of accepted domestic issuance in the last quarter, for which it has published (pdf) an issuance breakdown, against 15% for bonds. In addition, new domestic issuance carries an average maturity of about a year, so most of what it sells has to be refinanced within the year. The FY 2026/27 plan targeted EGP 3.4 tn in new sovereign debt for the full year, less than what was raised in the four months that have already turned over.

The shift to home funding was the plan: FY 2026/27 directs 89-93% of financing needs to the domestic market and 6-9% abroad, with concessional and semi-concessional loans and budget support expected to cover 66-72% of the external side. What the ministry can raise abroad is capped, as the Cabinet approved USD 3 bn in international issuances for the year, and the ministry has been weighing a return to the market between October and December. A senior Finance Ministry official tells EnterpriseAM that local borrowing is being prioritized even at today’s cost, arguing that it is still cheaper than the alternatives while international markets stay difficult.

IN CONTEXT- The rate rise that the official puts at EGP 150 bn was 100 bps on Thursday — the first hike since March 2024, reversing an easing cycle that delivered 825 bps of cuts across six meetings since April 2025 and defying analysts’ expectations for a hold. On a domestic debt stock of EGP 13.68 tn, 100 bps is worth about EGP 137 bn a year, by our math. The added burden has not changed the strategy, the official says: fund at home, lengthen the curve, and keep rolling the bills.

The ministry is working the maturity wall from both ends. It cut the share of 91-day bills in domestic issuance from 25.7% in July-September 2025 to 12.9% in January-March 2026, lifted the bond share to 15% over the same stretch, brought five-year bonds back, and introduced a three-year sukuk in the local market for the first time. Average maturity of new domestic issuance reached 1.1 years in April-June 2026, the highest in three years, against 0.84 years in July-September 2024, according to the ministry’s debt bulletin.

A new-ish instrument: The ministry issued an 18-month instrument carrying a variable return tied to the six-month Treasury bill auction, one of several tools under study, according to the official. The government used floating-rate paper before: the ministry sold its first 63-day floating-rate notes in July, and the March bulletin lists three-, five-, and 10-year floating-rate bonds. So what’s new is the 18-month maturity and the six-month index. Retail treasury paper for Egyptians abroad is also under study, with pricing the remaining step, the official says.

DATA POINT- Budget-sector debt stood at EGP 17.85 tn, or 83.9% of GDP, at the end of March 2026 — EGP 13.68 tn domestic and EGP 4.17 tn, or USD 76.6 bn, external. That is down from a peak of 95.7% in June 2023, and the government targets 78% by June 2027 and 71-73% by FY 2028/29. Gross financing needs fell by about five percentage points of GDP in FY 2025/26, according to the IMF, and the ministry targets another five this FY.

Domestic banks are carrying the load. The banking sector held 36% of the outstanding EGP T-bill portfolio and 63% of the T-bond portfolio as of March 2026, with foreign holdings at 12% and 11%. Foreign holdings of EGP government securities peaked at USD 38.1 bn in January and fell to USD 27.1 bn by March.

The retail side: The Citizen Bond, sold through Egypt Post at a 17.75% return over 18 months, launched in February and took EGP 2 bn in its first week. A second phase ran from April, and the official describes a further phase as possible early next year.

In other debt news

Egypt signed a USD 1 bn World Bank development policy financing agreement yesterday, according to a Cabinet statement, tying the second phase to state-company governance, private-investment barriers, competition rules, revenue mobilization, and the financial sustainability of electricity and water. The board approved the money in May (USD 800 mn from the bank plus a USD 200 mn UK credit guarantee) as the second tranche of a three-part program in June 2024, and it pays into the budget once the reforms are legislated. A third pillar, aimed at drawing private capital into those sectors, is due next year.