CBE reveals developments in Egypt’s external debt as of June 2024
Egypt’s external debt reached $152.9bn in June 2024, marking a decrease of approximately $11.8bn (7.2%) compared to June 2023. This decline resulted from several factors, including the conversion of around $11bn in UAE deposits at the CBE into investments for the Ras El Hekma development project, a $0.3bn increase in external loan disbursements, and a $1.1bn reduction due to the depreciation of most borrowing currencies against the US dollar.
Breakdown by Maturity
In terms of original maturity, Egypt’s external debt continued its trend of long-term debt predominance as of June 2024. Long-term debt amounted to $126.9bn, while short-term debt stood at $26bn. By residual maturity, short-term debt totaled approximately $52.8bn, with long-term debt reaching about $100.1bn.
Breakdown by Type
Long-term external debt stood at $126.9bn (83% of the total external debt) in June 2024, a decrease of about $9.7bn compared to June 2023. The reduction was mainly due to:
- A drop of $5.7bn in long-term deposits from Arab countries at the CBE, which reached $9.3bn ($5.3bn from Saudi Arabia and $4bn from Kuwait). This decrease was caused by the conversion of the UAE’s deposit at the CBE into investments for the Ras El Hekma development project.
- A $4bn decrease in debt owed to multilateral institutions, bringing it to $48.9bn.
- A $1.8bn reduction in bonds and sukuk issued abroad (non-resident holdings), which totaled $27.7bn. This reduction was due to the repayment of three tranches of bonds.
The outstanding stock of bonds and sukuk as of June 2024 included:
- Around $19.9bn in Eurobonds denominated in US dollars
- The equivalent of $4bn in Eurobonds denominated in euros
- About $1.5bn in sukuk issued in US dollars
- The equivalent of $841.4m in Samurai bonds denominated in Japanese yen
- About $725m in Green bonds issued in US dollars
- The equivalent of $481.5m in PANDA bonds denominated in Chinese yuan
- Around $345m in sovereign notes issued in US dollars
Additionally, rescheduled bilateral debt decreased by $0.3bn to $0.7bn, while Repurchase Agreements (Repo) totaled approximately $4.4bn (compared to $4.7bn). Non-guaranteed private sector debt increased by $0.2bn to $1.8bn, and buyers’ and suppliers’ credit rose by $0.2bn to $20.1bn. Other bilateral debt amounted to $14bn, up by $2bn from June 2023.
Breakdown by Currency
Analyzing the currency composition of Egypt’s external debt reveals important insights into the country’s exposure to currency market fluctuations. In June 2024, the US dollar remained the primary borrowing currency, constituting $101.2bn (66.2%) of the debt, followed by the euro at $18.4bn. Other major currencies included:
- Special Drawing Rights (SDRs) at $18.2bn
- The Chinese yuan at $4.8bn
- The Kuwaiti dinar at $3.8bn
- The Japanese yen at $3.2bn
- Other currencies at $3.3bn
Breakdown by Creditor
Egypt’s external debt was distributed across various creditors, with $51.5bn owed to multilateral institutions. The IMF alone represented 33.5% of these loans, totaling $17.3bn, broken down as follows:
- $7.4bn in the Extended Fund Facility (EFF)
- $3.8bn in Special Drawing Rights (SDR) allocation
- $3.6bn in the Stand-by Arrangement (SBA)
- $1.3bn in the Rapid Financing Instrument (RFI)
- $1.2bn in the New Extended Fund Facility
Other major multilateral creditors included the IBRD ($12.2bn or 23.7%), the European Investment Bank (EIB) ($4.5bn or 8.7%), and the African Development Bank (AfDB) ($2.6bn or 5.1%).
Egypt also owed $36.2bn to Arab countries, with the largest amounts due to Saudi Arabia ($12.6bn or 8.3% of total external debt), the UAE ($11.2bn or 7.3%), and Kuwait ($6bn or 3.9%). Furthermore, $12.6bn were owed to six members of the Paris Club, including Russia ($3.6bn), France ($2.5bn), Japan ($2.4bn), Germany ($2.1bn), the USA ($1.6bn), and the UK ($0.4bn), as well as $9.4bn to China.
Breakdown by Debtor Sector
The structure of Egypt’s external debt by debtor sector in June 2024 showed the following trends compared to June 2023:
- The Central Bank’s external debt decreased by about $9bn to $34.6bn, representing 22.7% of total external debt. This reduction was mainly due to the UAE’s deposits (both short-term and long-term) during the third and fourth quarters of FY 2023/2024.
- The government remained the largest debtor, responsible for around 52.4% of the external debt, though its debt decreased by about $3.2bn to reach $80.2bn. This decline resulted from a reduction in long-term loans and the repayment of three tranches of bonds issued abroad.
- Banks’ external debt decreased by $0.3bn to $20.7bn, accounting for 13.6% of the total debt, due to a reduction in short-term deposits and loans.
- Other sectors’ external debt increased by about $0.7bn to reach $17.4bn, representing 11.3% of total external debt, primarily due to an increase in short-term trade credits.
External Debt Service
External debt service increased to $32.9bn during FY 2023/2024, up from $25.4bn in FY 2022/2023. This increase was attributed to a $5.2bn rise in principal payments and a $2.3bn increase in interest payments.
External Debt Indicators
Key external debt indicators as of June 2024 showed the following:
- The external debt-to-GDP ratio was 38.8%, down from 40.5% in June 2023.
- Short-term external debt as a percentage of total external debt stood at 17% in June 2024, slightly down from 17.1% in June 2023.
- The ratio of short-term external debt to net international reserves (NIR) decreased to 56.1% in June 2024, from 80.8% in June 2023, reflecting the increase in NIR.
- Short-term external debt by residual maturity to total external debt was 34.5% in June 2024, up from 30% in June 2023.
- The external debt-to-exports of goods and services ratio increased to 243.4% in June 2024, up from 222% in June 2023.
- The debt-service ratio (annually) rose to 52.4% in June 2024, compared to 34.3% in June 2023. The ratio to current receipts increased to 37.7%, up from 25.7% in June 2023.
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