Egypt Watch

Governmental losses in Egypt in 2020 amount to $24bn due to coronavirus

The Egyptian Minister of Finance, Mohamed Maait, revealed that the state budget lost EGP 370 billion, equivalent to $23.6 billion in 2020, due to the repercussions of the corona pandemic.

Maait explained in a TV interview that these revenues were lost as a result of not collecting them from activities affected by the corona pandemic. However, he previously stated that his country’s economy was able to absorb the corona crisis. He said that the sectors related to civil aviation, tourism, and construction were the most affected, without giving further details.

The minister said that tourism is an important resource for the Egyptian economy. Egypt’s revenues from it were expected to reach about $14 billion in the current fiscal year, but they were completely lost.

The Egyptian minister added that the government aims to continue achieving a primary surplus (revenues are more than expenditures without counting debt service), bringing the surplus to 1.5 per cent of GDP. The Egyptian government seeks to finance the large deficit in the state budget by borrowing through the sale of treasury bills on an almost daily basis. Treasury bills are a short-term debt instrument issued by the government for borrowing and are considered a commitment by the government to pay a certain amount on the maturity date.

Following the finance minister’s statements, the Central Bank of Egypt announced the sale of treasury bills denominated in dollars for one year, at a value of $988.5 million, with an average return of 3.095 per cent. The tender will be settled on May 4. In early December, the Minister of Finance said that foreign investments in Egyptian debt instruments exceeded $23 billion.