Egypt is planning on reducing public debt to 80 percent of GDP by 2022 and cutting the rate of the total budget deficit to about seven percent of GDP in the fiscal year 2019/2020, said Minister of Finance Mohamed Maait.
The ministry succeeded in reducing the debt ratio to the domestic product to reach 97 percent of GDP in 2018 instead of 108 percent of GDP the year before. For the first time in 15 years, a 0.2 percent surplus of GDP was achieved amid an objective to raise it to 2 percent in the current budget.
“The new plan also benefits from the government's success in raising the economic growth rate to 5.5 percent in the fourth quarter of last fiscal year, and aims to increase it to 5.8 percent this year, while achieving economic stability that ensures continued progress,” Maait said during a news conference on Thursday.
This came during Maait’s meeting with Senior Vice President of the European Bank for Reconstruction and Development (EBRD) Jurgen Rigterink and his delegation, in the presence of Deputy Minister of Finance for Financial Policies Ahmed Kojak, Assistant Minister of Finance for the Operations of Capital Markets Khaled Abdel Rahman, Assistant Minister for Economic Affairs Shereen el-Sharkawy, and representatives of the Egyptian ministry.
This is the outcome of the reform program that enabled economic improvement despite the challenges faced by the Egyptian government, stressed the finance minister.
In this context, the ministry is working in accordance with a strategic plan aimed at developing and improving the efficiency of the Egyptian tax and real estate taxes, as well as the Customs Authority, facilitating and standardizing all procedures and applying the mechanization system that will attract more investments to the local market and encourage trade.
The minister stressed the importance of the private sector's role in participating in economic growth to maintain economic sustainability, referring to a draft law on small and medium industries that will be presented soon to the cabinet.
For his part, Rigterink congratulated Maait for receiving the title of the best finance minister in the African continent for 2019, according to "The Banker”.
Rigterink also lauded the ministry's serious steps towards economic reform that are putting Egypt on the right track. He pointed out that EBRD and Egypt share a solid relationship, as the number of private sector projects financed by the bank in 2018 ranges between 40 and 50 with funding of about EUR1.2 billion.
"We are working on bond issuance plans such as Euro bonds, green bonds, and bonds with different and longer-term segments and are going to rely on long-term segments to prolong debt life and reduce its service bill," said Kojak in response to questions by the delegation on the government’s current plan.
Kojak added that the ministry is also working on increasing foreign investment in Egypt, saying Egyptian officials have visited several countries such as Japan, Singapore, South Korea in order to attract more foreign direct and indirect investments.
