FILE - Deputy Finance Minister Ahmed Kojak
CAIRO - 6 October 2022: Egypt’s external debt rates represent 34 percent of the gross domestic product (GDP), according to the Deputy Minister of Finance, Ahmed Kojak.
Kojak elaborated that the debt percentage is within safe rates, noting that the state is working to reduce it to 30 percent during the coming period.
The Deputy Finance Minister said that the volume of government external debt served by the Ministry of Finance represents only about 40 percent of the total Egyptian external debt, amounting to $82 billion.
“Those amounts and government indebtedness were used over the past years and decades to finance the needs of the budget and its agencies, while the rest of the amount of external indebtedness represents loans and debts owed by the Central Bank and the rest of the economic bodies and government agencies and bodies as well as banks and other economic sectors, including the private sector,” he added.
He added that the main challenge is how to ensure work to reduce the ratio of government indebtedness to GDP, and to the size of the Egyptian economy on an annual basis, noting that one of the positive things about government indebtedness is that about 62 percent of it has a fixed interest rate, which protects the debt service bill.
The external debt is exposed to the risks of high interest rates, as is the case in the international markets, and the average life of the external debt is close to 10 years, which is a positive element and helps to prolong the life of government debt, according to Kojak.
He added that the government is making sure that the growth rates are going well, and it has a set of investments and assets that the state will offer to the private sector, and they will be managed by the private sector, and through the funds and profits achieved, part of them will be used to reduce government indebtedness.
Kojak pointed out that the state ownership policy document will add great clarity to the private sector, on the areas that will be left to full competition by the private sector.
The document aims to develop a clear and specific regulatory framework for regulating relations in economic activities between the state and the private sector.