The Central Bank of Egypt (CBE) said the North African nation’s external debt registered $164.7bn at the end of June 2023, up by about $9.0bn or 5.8% year over year (Y-o-Y).
This resulted from the rise in net disbursements of loans and facilities by $8.9bn and the depreciation of the US dollar exchange rate vis-à-vis the other currencies of the external debt, which led to an increase of $147.9m in book value.
Egypt’s debt breakdown by maturity
By original maturity, Egypt’s external debt reaffirmed its pattern of long-term debt predominance at the end of June 2023.
Long-term debt accounted for $136.6bn, whereas short-term debt accounted for $28.1bn.
By residual maturity, short-term debt amounted to about $49.4bn at the end of June 2023. Meanwhile, long-term debt reached about $115.3bn.
Breakdown by type
Egypt’s Long-term external debt registered $136.6bn, or 82.9% of total external debt at the end of June 2023, up by about $7.5bn compared with the end of June 2022.
Buyers’ and suppliers’ credit reached about $19.9bn, up by $3.5bn at the end of June 2023, compared with the end of June 2022.
Multilateral institutions’ debt reached about $52.9bn, up by $1.7bn, as compared with the end of June 2022.
Other bilateral debt 1 amounted to some $12bn, up by $895.7m.
Non-guaranteed private sector debt reached $1.6bn, up by $752.5m. This rise, which was realized mainly during the period January-March 2023, resulted from a loan of about $750m granted to a private bank by its headquarters.
It is worth noting that this outstanding stock includes the Green bonds, issued by the Commercial International Bank in July 2021, with a nominal value of $100m.
Egyptian bonds issued abroad non-resident holdings reached $29.5bn, up by $465.7m.
The outstanding stock of bonds as of June 2023 includes the following:
Roughly $22.4bn of Eurobonds issued in US dollars, the equivalent of about $4.1bn of Eurobonds denominated in euro, about $1.5bn of SUKUK issued in US dollar in February 2023, about $737.2m of Green bonds issued in US dollar, the equivalent of about $419.2m of Samurai bonds issued in Japanese yen, and about $355.4m of sovereign notes issued in US dollars.
Moreover, the repurchase agreements repo registered about $4.7bn, while long-term deposits placed at the CBE by some Arab countries registered about $15bn.
These deposits are distributed as follows, $5.7bn by the United Arab Emirates, $5.3bn by Saudi Arabia, and $4bn by Kuwait.
Rescheduled bilateral debt reached around $1bn, down by $ 270.5m.
Similarly, short-term debt increased by about $1.5bn compared with June 2022 to reach about $28.1bn at the end of June 2023, or 17.1% of total external debt. Newly placed Arab countries’ deposits at the CBE constituted more than half of the short-term debt at the end of June 2023, registering $15.4bn. Also, another $2.5bn represents the Currency Swap Agreement between the CBE and the People’s Bank of China.
Breakdown by currency
Measuring the currency composition of Egypt’s external debt is an important indicator that sheds light on the external debt exposure to currency markets’ volatility.
The currency composition of external debt reveals that the US dollar is the main borrowing currency $112.6bn, or 68.4%, followed by the euro with $18.3bn at the end of June 2023.
Other major currencies recorded $33.8bn, distributed as follows: SDRs were the runner-up $22.2bn, the Kuwaiti dinar $3.9bn, the Chinese yuan $3.2bn, the Japanese yen $2.6bn, the Saudi Riyal $1.4bn, and other currencies $0.5bn.
Breakdown by creditor
Egypt’s external debt distribution by creditors indicates that $52.9bn was owed to multilateral institutions. The IMF loans alone represent 40% of these institutions’ loans, or the equivalent of $21.2bn, which were classified as follows, $9.3bn in Extended Fund Facility (EFF), $2.7bn in Rapid Financing Instrument (RFI), $5bn in Stand-by Arrangement (SBA), $3.8bn representing SDR allocation, $348.4m representing the First Tranche of the New Extended Fund Facility.
The other major multilateral creditors, which European Bank for Reconstruction and Development (EBRD) $12.3bn or 23.3%, the European Investment Bank (EIB) $4.8bn or 9%, the African Development Bank (AfDB) $2.9bn or 5.4%, and Arab Fund for Economic and Social Development $2.2bn or 4.1%.
Additionally, $46.2bn was owed to Arab countries mainly; UAE about $20.9bn or 12.7% of total external debt, Saudi Arabia $12.2bn or 7.4%, Kuwait $7.1bn or 4.3%, and Qatar $4bn or 2.5%.
Meanwhile, $8.8bn came from five members of Paris Club countries, namely; Germany $2.4bn, Japan and France $2.3bn each, and the UK and USA $0.9bn each. In addition, $8.3bn was owed to China.
Breakdown by debtor sector
The structure of Egypt’s external debt by debtor sector at the end of June 2023 compared with the end of June 2022 reveals that:
Banks’ external debt increased by about $3.3bn to $21bn, representing 12.7% of external debt. This increase resulted from the rise in long-term loans received by banks by $3.9bn and the decrease in short-term loans and deposits by about $0.6bn.
The Central Bank’s external debt increased by about $2.7bn to $43.6bn, representing 26.5% of external debt.
Other sectors’ debt increased by about $1.9bn to $16.7bn, representing 10.1% of external debt.
The government remains the main obligor, with a share of around 50.7% of external debt. Egyptian government debt increased by about $1.1bn, reaching $83.4bn. The majority of this increase has been reflected in the long-term loans by $0.7bn, and bonds floated abroad by $0.4bn. It is worth noting that from January to March 2023, the government issued $1.5bn of SUKUK in international markets and repaid a tranche of Eurobonds issued in US dollars in the amount of some $0.9bn.
External debt service
Debt service retreated to $25.4bn principal repayments registered $18.4bn, and interest payments $7bn during FY 2022/23, compared with $26.3bn in FY 2021/22. This decrease in Egypt’s debt service reflects the reduction in principal repayments by about $3.3bn, and the increase in interest payments by about $2.4bn.
External debt indicators
Egypt’s external debt stock to GDP represented 40.3% at the end of June 2023 compared with 32.6% at the end of June 2022.
Short-term external debt by original maturity to total external debt registered 17.1% at the end of June 2023, which is the same at the end of June 2022.
Its ratio to net international reserves increased to 80.8% at the end of June 2023, from 79.7% at the end of June 2022.
Short-term external debt by residual maturity to total external debt registered 30% at the end of June 2023 against 27.1% at the end of June 2022.
Its ratio to net international reserves increased to 142% at the end of June 2023 against 126.4% at the end of June 2022.
Egypt’s external debt stock to exports of goods and services registered 222% at the end of June 2023 against 219.8% at the end of June 2022.
Debt-service ratio2 decreased to 34.3% at the end of June 2023 compared to 37.1% at the end of June 2022 Moreover, debt-service ratio when calculated as a ratio to current receipts3 improves considerably to reach 25.7% at the end of June 2023 compared to 25.2% at end of June 2022.
