RIYADH: Egypt has successfully repaid $38.7 billion in debts during 2024, including $7 billion in November and December, demonstrating its commitment to meeting financial obligations despite significant economic challenges.
The announcement was made by Egyptian Prime Minister Mostafa Madbouly during a Cabinet meeting, where he emphasized the government’s efforts to manage debt repayments in the face of a volatile global economic environment.
As Egypt continues to tackle its economic difficulties, the country is also set to receive around $1.2 billion from the International Monetary Fund under a staff-level agreement for the Extended Fund Facility program. The agreement, which is pending approval from the IMF’s executive board, aims to provide crucial financial support to stabilize Egypt’s economy.
This funding is part of Egypt’s broader strategy to stabilize its economy amid soaring inflation and lower-than-expected revenues, including a significant drop in earnings from the Suez Canal.
“The Egyptian authorities have consistently implemented key policies to maintain macroeconomic stability, despite the ongoing regional tensions and the sharp decline in Suez Canal receipts,” said Ivanna Vladkova Hollar, who led the IMF mission to Egypt.
Egypt’s Foreign Minister Badr Abdelatty revealed last month that the country had lost $8 billion in Suez Canal revenues, underscoring the broader economic challenges.
In response, the IMF and Egyptian authorities have agreed to revise the country’s fiscal consolidation strategy, allowing for crucial social programs aimed at supporting vulnerable groups and the middle class, while ensuring long-term debt sustainability.
“Special attention will be required to manage fiscal risks related to state-owned enterprises in the energy sector, and to enforce the strict implementation of the public investment ceiling, which includes capital expenditures from public entities operating outside the general government budget,” added Hollar.
The reduction in external debt is a significant achievement, reflecting the Egyptian government’s commitment to managing its financial obligations despite the ongoing global economic turbulence.
Despite economic hurdles like rising inflation and fiscal deficits, Egypt has worked to balance addressing external debt with fostering sustainable growth. This debt reduction is expected to improve Egypt’s creditworthiness, sending a positive signal to international markets and potentially attracting more global investment.
To stimulate further economic growth, Madbouly also announced plans to privatize several airports and banks, to boost private sector involvement in the economy.
