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Egypt implements strict borrowing controls to ensure financial stability, food security

Egypt prioritizes feasibility and local value in state loans amid uncertainty. Structural reforms and resilient sectors drive sustainable growth.

By: Mohamed Zain

Tue, Jun. 6, 2023

Amidst global uncertainties, Egypt's government emphasizes feasibility and local value in state loans, ensuring financial stability and food security — Photo illustrated by Business Today Egypt

Dr. Hala El Said, Minister of Planning and Economic Development, emphasized the necessity of conducting feasibility studies and ensuring local value-added components in the country's loans. In light of the current uncertain conditions faced by Egypt, similar to the rest of the world, strict borrowing controls have been implemented, with loans only granted for projects related to food security and energy.

These developmental loans feature long grace periods and reduced interest rates, serving as concessional financing solutions during these exceptional circumstances that require careful consideration of various dimensions in the planning process.

During a press conference, Dr. El Said outlined several criteria for reviewing and approving loans, including the requirement that loans not be granted to entities that have not utilized or utilized the previous loan amounts.

She further explained that global uncertainties resulting from current geopolitical influences have impacted countries in terms of price levels, imported goods, energy prices, wheat availability, and more, consequently driving inflation rates higher.

However, she highlighted the Egyptian government's significant efforts in mitigating inflation rates while ensuring the availability of goods at lower prices to alleviate the burden on citizens.




Maximizing investment returns:


Adding to her remarks, Dr. El Said stated that the economic and social development plan for the new fiscal year includes targets for distributing application forms. The focus has primarily been on projects nearing completion and reaching an execution rate of approximately 70%.

This approach aims to enable citizens to benefit from these projects, thus maximizing the return on investments.

She affirmed that the government strives to maintain a balance between the volume of investments injected into the economy and their suitability for job creation and citizen well-being.

Furthermore, Dr. El Said acknowledged that the Egyptian economy has been affected by global repercussions, starting from the impact of COVID-19 to the ongoing Russo-Ukrainian conflict. Nevertheless, she expressed confidence in the Egyptian economy's fundamentals, which position it to overcome these exceptional circumstances.

She highlighted the National Program for Structural Reforms, which relies on further stimulation of the private sector, enhancing the efficiency of the labor market in technical education, and increasing the real economy and exports. Additionally, she noted improvements in various sectors, such as a more than 20% increase in revenues from the Suez Canal, improved gas exports, and the recovery of the tourism sector.




Egypt's economic reforms yield promising results:


Amidst a challenging global economic landscape, Egypt's steadfast commitment to economic reforms and strategic policies has begun to bear fruit.

The country has witnessed notable advancements in key sectors, signaling resilience and positive growth prospects.

Noteworthy achievements include a significant surge in revenues from the Suez Canal, boosted gas exports, and a revived tourism industry.

These positive developments, combined with the Egyptian government's ongoing efforts to enhance the private sector, optimize the labor market, and stimulate economic expansion, lay a solid foundation for sustainable economic progress.