Egypt's Foreign Debt Plummets by $7.4 Billion in Q1 2024, Boosted by Land Sale to UAE
In a significant financial development, Egypt's foreign debt has decreased by $7.4 billion in the first quarter of 2024, as per the latest data from the central bank. This positive trend comes on the heels of the country's sale of development rights to prime Mediterranean land at Ras El-Hekma to the United Arab Emirates for a whopping $35 billion in late February.
The total foreign debt now stands at $160.6 billion, down from $168.0 billion at the end of December and $164.5 billion at the end of September, showcasing a steady decline. Egypt had significantly increased its external debt since 2015 to fund various projects such as building a new capital, infrastructure development, defense purchases, and maintaining a stable currency.
Furthermore, in March, Egypt inked an $8 billion financial support deal with the International Monetary Fund (IMF), committing to a free-floating currency. The IMF has already disbursed an initial $820 million in March, with the remaining amount scheduled to be released in semi-annual installments until September 2026.
Notably, 84.2% of Egypt's foreign debt is long term, accounting for 39.8% of the country's gross domestic product, a decrease from 43% in December, as per the central bank's report.
In conclusion, Egypt's declining foreign debt coupled with strategic financial agreements with international institutions like the IMF demonstrates the country's commitment to maintaining a stable economic outlook. This trend can potentially lead to increased investor confidence, economic growth, and overall financial stability in Egypt.