Egypt Watch

Debt-addiction: Egypt gets the second tranche of a $1.2 billion Japanese loan

On Tuesday, the Japan International Cooperation Agency and the Egyptian government signed an agreement to disburse the second tranche, $301 million, of a $1.2 billion Japanese loan. The loan covers the construction costs of the first phase of Line 4 of the Great Cairo Metro. The Egyptian government received the first loan instalment, $291.5 million, in 2012. The construction is expected to take six years.

The Executive Board of the International Monetary Fund (IMF) approved granting Egypt a loan of three billion dollars over the next four years, with an immediate disbursement of $347 million. According to experts, Egypt’s payments to the fund will far exceed the value of what it will receive from it over the next four years, at a time when it hopes that the loan will help the balance of payments and the public budget.

Egypt must pay the IMF approximately $17.5 billion over the following four years. Egypt’s repayment obligations to the IMF are as follows: $3.7 billion in 2023; $6.2 billion in 2024; $5.1 billion in 2025; and $2.5 billion in 2026. Egypt is the second largest borrower from the IMF, after Argentina. Egypt’s debt is the highest in the Middle East and North Africa, equalling about 35.5% of the region’s total debt in 2020.