The Minister of Finance during the opening of the International Conference on “Alternative Financing” opportunities:
The Egyptian economy is more coherent in facing global challenges
Business Hub _Exclusive_Cairo
Dr. Mohamed Maait, Minister of Finance, confirmed, “Alternative financing” has become more important in light of the intertwining of global challenges, which have increased in severity, with the negative effects of the Ukrainian crisis, on economies exhausted by the Corona pandemic, And what followed was an inflationary wave that some countries had not witnessed for more than forty years. disruptions in supply and supply chains, Unprecedented rise in shipping costs, prices of goods and services, As the crises collapsed on the global economy; To face what he has not faced in a hundred years; Growth rates and GDP are declining, Which puts enormous pressure on various countries: advanced, developing, In the midst of a race to rein in inflation.
Minister added, In the international conference on “Alternative Financing Opportunities in Egypt: Towards sustainable financing for development” held in cooperation between the two ministries of finance, Towards sustainable financing for development” held in cooperation between the two ministries of finance, We are proceeding with maximizing efforts to diversify sources and financing tools to reduce the cost of development investments. Especially in light of the current global crisis, due to the high cost of financing, The growing uncertainty of investors, He explained that Egypt has become on the map of sustainable financing for the green economy. By issuing the first sovereign green bond offering in the Middle East and North Africa, valued at $750 million in September 2020, As it contributed to attracting new investors who prefer green investment in Europe, and the United States of America, East Asia and the Middle East.
Issuance of the first offering of sovereign sukuk before the end of the current fiscal year, and the first issuance of Egypt’s “samurai” bonds on the Japanese market
Minister indicated, that we are preparing to issue the first sovereign sukuk before the end of the current fiscal year; To attract a new segment of Arab and foreign investors, especially from the Middle East, North Africa and Asia, who prefer financial transactions in accordance with the principles of Islamic Sharia; which contributes to providing the necessary financing for investment projects, included in the economic and social development plan in the state’s general budget, Pointing out that Egypt’s first issuance of “samurai” bonds was launched on the Japanese market. 60 billion yen, equivalent to about half a billion dollars, In a way that attracted many Japanese investors, where it was very popular, This indicates their confidence in the solidity of the Egyptian economy and its ability to achieve its goals in light of the current global economic repercussions.
Issuance of Egyptian yuan bonds in the Chinese market
The minister explained, We are targeting joint cooperation with the Chinese side to issue Egyptian yuan bonds in the Chinese market, It is the second largest bond market in the world. which contributes to diversifying the sources and tools of financing, and attract new investors, It helps reduce the cost and diversify sources of financing for development investments. We are also considering offering sustainable development bonds to finance initiatives with a social dimension, Pointing out that Egypt’s hosting of the Climate Summit, Reaffirms the state’s keenness on the sustainability of clean investment, the transition to a green economy, through environmentally friendly projects.
The Minister confirmed, Egypt is, it was not isolated from the extraordinary repercussions that the world was suffering from, It constitutes a more turbulent economic scene in light of a conflict whose duration is unknown, However, we initiated a new financial package for social protection, Supporting the groups and sectors most affected by the current global crisis, This was followed by an integrated plan to face international economic challenges; Which contributes to bearing the greatest burden on the citizens; As an extension of a proactive methodology with which we have been able to overcome together: leadership, government, and people, The Corona pandemic, which cast a shadow over the world’s largest economies, Egypt was among the few countries that recorded positive growth rates; with the gains it has achieved; As a result of the elaborate implementation of the economic reform program.
The Egyptian economy is more coherent in facing global challenges
Minister added, that the Egyptian economy has become more coherent in the face of global challenges; It has the ability to deal positively and resiliently with internal and external shocks; What motivates us to complete the process of achieving financial discipline and maintaining a safe economic path for the state, Despite these exceptional circumstances, It is expected that an initial surplus of EGP 91 billion will be recorded. Reducing the total deficit of GDP to 6.2%, And the debt rate of the budgetary organs will reach 85% by the end of the current fiscal year next June.
Minister said, We are working during the new fiscal year 2022/2023, to achieve ambitious goals, In the light of an exceptionally turbulent global scene In an exceptionally turbulent global scene, The total revenue targeted in the new budget project is 1.5 trillion and 18 billion pounds. While the total expected expenditures amount to 2 trillion and 71 billion pounds, 356 billion pounds have been allocated for support and social protection. and 400 billion pounds for wages, and 376 billion pounds for public investments, with an annual growth rate of 9.6%, to improve services provided to citizens and create more job opportunities, especially for young people. With the increase of environmentally friendly projects to 50%
Minister indicated, We aim to record a first surplus of 132 billion pounds, at a rate of 1.5 percent. And reduce the total deficit to 6.1% of GDP, Compared to a total deficit of 12.5% at the end of June 2016, And put the debt rate on a sustainable downward path to reach less than 75% of GDP over the next four years, We aim to reduce the debt rate to 84% of GDP, compared to 103% at the end of June 2016. Reducing the debt service ratio to 7.6% of GDP, and 33.3% of budget expenditures, Along with efforts to diversify sources of financing to reduce the cost of development, Extending the life of the debt.
The opening session of the conference was attended by Dr. Hala Al-Saeed, Minister of Planning and Economic Development, Gareth Davies, Head of the Macroeconomic Reform and Stability Project, and Nicole Champagne, Chargé d’Affairs at the US Embassy in Cairo. And Dr. Mahmoud Mohieldin, Executive Director of the International Monetary Fund, participated in the video conference.