Egypt’s Parliament yesterday approved President Abdel Fattah Al-Sisi’s request for a $2 billion commercial loan from a consortium of regional banks, including Emirates NBD Capital Limited, Standard Chartered, Arab Banking Corporation (ABC), First Abu Dhabi Bank, Mashreq and Emirates NBD (PJSC).
Finance Minister Ahmed Kouchouk addressed lawmakers, stating that the government is repaying previous loans in larger installments than agreed. This, he explained, is expected to lead to a gradual decline in external debt. He emphasised that the new loan agreement features favourable terms and substantial benefits concerning interest rates and repayment conditions.
Kouchouk described the $2 billion financing as an excellent opportunity to bolster the country’s economy and help address the budget deficit.
Mohamed Al-Sallab, head of the Parliament’s Industry Committee, affirmed that this agreement serves as a refinancing measure for previously secured loans. He highlighted its significance in demonstrating Egypt’s commitment to meeting its financial obligations. Al-Sallab noted that while foreign loans are indispensable for maintaining liquidity in hard currency – crucial for overall economic stability – they cannot be eliminated all at once.
However, Representative Diaa El-Din Dawoud expressed opposition to the loan agreement. He criticised what he perceives as a perpetual reliance on regional borrowing without adequate transparency regarding expenditures. Dawoud cautioned that increasing national debt poses risks to Egyptian security amid current regional tensions.
As of June 2024, official figures indicate that Egypt’s external debt reached approximately $152.9 billion by the end of fiscal year 2023-2024; a notable increase from around $46 billion when Al-Sisi assumed power in 2014. This surge is attributed mainly to substantial investments in constructing a new administrative capital and expanding infrastructure projects, along with arms purchases from both the United States and Europe as well as supporting the local currency.