Egypt’s external debt registered $125.3bn in September 2020, the Central Bank of Egypt (CBE) has revealed, up by about $1.8bn compared to June 2020.
This increase came as a result of the rise in net disbursements of loans and facilities by $0.4bn, alongside the depreciation of the US dollar exchange rate versus other currencies of external debt. This, in turn, led to an increase of $1.4bn in book value.
By original maturity, external debt reaffirmed its pattern of long-term debt predominance at the end of September 2020.
Long-term debt accounted for $113.0bn or 90.2% of the total external debt, whereas short-term debt settled at $12.3bn or 9.8%.
By residual maturity, short-term debt accounted for 23.2% of total external debt at the end of September 2020, compared to 9.8% classified by original maturity.
Meanwhile, long-term debt accounted for 76.8% of total external debt, in comparison to 90.2% by original maturity.
Long-term external debt registered $113.0bn, accounting for 90.2% of total external debt, at the end of September 2020, up by about $0.4bn compared to the end of June 2020.
Of this, multilateral institutions’ debt reached some $44.3bn, up by 3.0% relative to June 2020.
Bonds issued abroad (non-resident holdings) reached some $24.1bn, up by 0.9%. Bonds outstanding stock include: about $0.3bn of sovereign notes issued in April 2010 and falling due in 2040.
This is alongside roughly $19.4bn of Eurobonds issued in US dollars, issued in: June 2015 and which are due in 2025; January and May 2017 (due in 2022/2027/2047); February 2018 (due in 2023/2028/2048); February 2019 (due in 2024/2029/2049); and in November 2019 (falling due in 2023/2032/2059). This comes alongside about $4.4bn of Eurobonds denominated in Euros, issued in April 2018 and falling due in 2026 and 2030, and in April 2019 (falling due in 2025 &2031).
Other bilateral debt amounted to some $10.7bn, up by 4.5%, whilst buyers’ and suppliers’ credit reached about $12.0bn, increasing by 5.3%.
Repurchase Agreements (Repo) recorded $4.0bn at the end of September 2020. Non-guaranteed debt of the private sector registered $0.4bn, down by 8.3%, and rescheduled bilateral debt reached around $2.3bn, down by 9.6%.
Long-term deposits placed at the CBE by some Arab countries posted $15.2bn, distributed as follows: $5.5bn for Saudi Arabia; $5.7bn for the UAE; and $4.0bn for Kuwait.
Meanwhile, the short-term debt increased by about $1.4bn to about $12.3bn (9.8%) of the total external debt. Its ratio to net international reserves edged up to 32.1% at the end of September 2020, from 28.5% in June 2020.
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 the debt indicates that the US dollar is the main borrowing currency, at $77.5bn. This includes other outstanding obligations in the US dollar to creditors, other than the US, such as international institutions.
Other major currencies recorded $47.8bn, distributed as follows: SDRs were the runner-up at $19.5bn; followed by the Euro at $16.9bn; the Chinese Yuan at $3.7bn; the Kuwaiti Dinar at $3.0bn; the Japanese Yen at $2.6bn; and other currencies at $2.1bn.
Debt distribution by creditor indicates that $44.3bn was owed to multilateral institution, which were mainly: the IMF, with $18.3bn; the International Bank for Reconstruction and Development (IBRD), with $11.4bn; the European Investment Bank (EIB), with $3.6bn; and the African Development Fund (ADF) and the African Development Bank (AfDB), with $2.8bn.
Additionally, a total of $24.6bn was owed by Egypt to Arab countries, mainly: Saudi Arabia at 5.9% of total external debt; the UAE at 9.1%; and Kuwait at 4.4%.
Meanwhile, a total of $9.8bn came from five members of the Paris Club countries, namely: Germany ($3.1bn); Japan ($2.5bn); the UK ($1.8bn); France ($1.7bn); and the US ($0.7bn). In addition, $7.1bn was owed to China.
The structure of Egypt’s external debt by debtor sector at the end of September 2020 reveals that:
- The government remains the main obligor, with a share of 58.4% of external debt. Its debt increased by $3.8bn compared to June 2020, reaching $73.1bn;
- The CBE’s external debt decreased by about $2.0bn to $25.9bn;
- The external debt of banks operating in the Egyptian market decreased by about $0.1bn to $11.8bn;
- Other sectors’ debt increased by about $0.1bn to $14.5bn.
Meanwhile, Egypt’s debt service reached $4.9bn, with instalment repayment registering $3.7bn, and paid interest at $1.2bn during July/September of fiscal year (FY) 2020/21. This compared to $2.9bn during July/September of FY 2019/20. This increase was mainly due to the increase in instalments repayment by about $2.0bn to record $3.7bn.
As for the external debt in terms of international comparison, Egypt’s debt remains within manageable limits.
Based on International Monetary Fund (IMF) classifications, comparing Egypt’s key debt indicators with those of other regional country groups shows that the country’s debt stock to GDP represented 33.9% at the end of September 2020. This compared to 48.7% for Latin America and the Caribbean, and 47.5% for the Middle East and Central Asia.
Egypt’s short-term external debt to total external debt at end of September 2020 registered 9.8%, compared to 14.2% for Latin America and the Caribbean, and 21.3% for the Middle East and Central Asia.
At the same time, the country’s debt-service ratio registered 44.7% in the year ending in September 2020. This compared to 46.4% for Latin America and the Caribbean, and 23.1% for the Middle East and Central Asia.