Egypt's Debt Soars to $293 Billion: Prime Minister

Published March 1st, 2016 - 12:00 GMT
Egypt's Prime Minister Sherif Ismail. (Twitter)
Egypt's Prime Minister Sherif Ismail. (Twitter)

Egypt’s debts have reached EGP 2.3 trillion (around $293 billion), Prime Minister Sherif Ismail said on Monday.

Meanwhile, the state’s general budget does not exceed EGP 864 billion, the prime minister said during a meeting with lawmakers, according to a statement by the Cabinet.  

The debt service cost is EGP 250 billion, while EGP 218 billion are paid in wages and EGP 230 billion are allocated to subsidies, Ismail said. This leaves around EGP 164 billion only for health, education, housing, sanitation, drinking water and roads.

In March 2015, the Central Agency for Public Mobilization and Statistics, the state’s statistics agency said Egypt’s total debt jumped up to $283 billion, which includes $45.3 billion of foreign debts. According to the agency, domestic debt climbed to $238 billion at the end of the previous fiscal year, FY2014/2015.             

Years of political turmoil led to a drop by more than a half of Egypt's foreign reserves in the years following the popular uprising in January 2011, which ended the rule of President Hosni Mubarak. The instability that ensued has taken a toll on tourism and investments, which were previously among the main sources of foreign currency for Egypt.  

Ismail said the government and parliament need to work together for development across all sectors, adding that utilities need to be developed after having been neglected for too long.

The minister said services must be provided at the appropriate cost, to “guarantee their continuity”.

Egypt has lately been scrambling to collect money as it faces a dollar shortage. In December, the World Bank has agreed to grant Egypt a $3 billion loan to be disbursed over three years. The loan conditions were revealed in an 80-page report earlier this month and entail reducing the government’s wages bill, energy subsidies, while raising tax revenue and electricity prices.              

The African Development Bank (AfDB) approved a $500 million soft loan to Egypt's cash-strapped government, also in December. It was part of a wider economic development programme which will see the bank support Egypt with $1.5 billion over three years.

(1 dollar = 7.73 Egyptian pounds)

 

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