FinMin targets EGP tns in new debt as it revises financing gap to EGP 4 tn

The Finance Ministry is set to deploy EGP 3.4 tn in new sovereign debt in FY 2026/27 — an EGP 241 bn increase — to cover an expected financing gap of EGP 4 tn, according to budget documents seen by EnterpriseAM.

Why it matters: Remember that ambitious target to collect EGP 3.5 tn in tax revenues in FY 2026/27? The government was optimistic that this tax would shrink our financing gap to a manageable EGP 2.7 tn, but reality — and regional volatility — have bitten. As the government modeled out the impact of the ongoing Middle East conflict, including the resulting exchange rate shocks, they had to adjust their math. The new budget document now officially fixes the financing gap at a much wider EGP 4 tn.

Familiar territory: “The ministry has already begun its moves to modify the public debt structure, minimizing the short-term financial burden in favor of extending debt maturities and diversifying local and foreign offerings,” a senior government official at the Finance Ministry tells us.

Here’s the breakdown: Long-term bonds will capture the lion’s share of the domestic market at EGP 2.5 tn — a 169% y-o-y increase — while short-term treasury bills will drop to EGP 916 bn. On the external front, the government is targeting USD 11.2 bn in foreign financing, anchored by USD 4 bn in concessional facilities, we’re told.

Wider gap, wider net: The ministry is rolling out new instruments to attract a wider investor base and distribute risk, including green bonds, zero-coupon bonds, floating-rate instruments, and products targeted at Egyptians abroad. The government will also focus on development finance institutions alongside both traditional and non-traditional international issuances, including green Samurai and Panda bonds.