ASA illustrates reasons for surging public debt

CAIRO – 19 May 2017: Egypt’s public debt has risen since the government expands in issuing bonds and treasury bills in addition to getting loans with the aim of funding a large part of the budget, the Accountability State Authority (ASA) said in a Thursday report.

The report, which Egypt Today had a copy of, was submitted to the House of Representatives for review while discussing the final budget for the 2015/2016 fiscal year.

Egypt’s net public debt surged 21.5 percent, registering 2.499 trillion EGP year-on-year in June 2016.

The government debt includes a domestic debt of about 2.286 trillion EGP accounting for 91.5 percent, while the external debt stands at 213.7 billion EGP representing 8.5 percent.

Last week, the International Monetary Fund (IMF) said Egypt has drafted a very strong budget which, if enacted by the parliament, would place public debt on a clearly declining path to sustainable levels.

After floating its pound in November 2016, introducing a value-added tax and slashing fuel subsidies as part of a comprehensive reform program, Cairo clinched a three-year $12 billion loan agreement with the IMF to support the country’s ambitious reform scheme.

Shortly after inking the deal, the Central Bank of Egypt (CBE) received the first tranche, worth $2.75 billion.