Egypt Watch

Debt-addiction: Sisi approves 95 million euros loan from French Development Agency

On Wednesday, Egyptian President Abdel Fattah El-Sisi approved a loan from the French Development Agency of 95 million euros to develop the Tanta-Mansoura-Damietta railway.

Sisi approved a 221 million euros loan from the European Investment Bank on December 22 to develop the same railway. The recent French loan aims to develop the railway by improving traffic safety, providing safer passenger conditions, and increasing passenger and freight capacity. 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.