Test Debt Guide

Country Debt Guide
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Egypt
This report estimates Egypt is only fulfilling 13% of total tax potential, a figure which has been steadily increasing
over the past few years but still remains low.
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To ensure pre-pandemic efforts to plug this gap are not wasted, the
IMF has affirmed its support for the continuation of Egypt’s policy changes through SBA financing while the
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government is strengthening domestic resource mobilization. Assuming global economic recovery and effective
policy implementation, the Egyptian economy is expected to grow by 2.1% in 2021.
The COVID19 Impact
In order to respond to COVID19, the Egyptian government has introduced cash transfers to informal workers
and pregnant and lactating non-Syrian refugees, and the postponement of property tax payments borne by key
businesses. These programmes were intended to reach approximately 33 million people – 32.4% of the
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population. By September 2020, the measures have been estimated to cost $63 billion (2.5% of GDP).
The wide reach is because the Egyptian economy faces several vulnerabilities due to the onset of the pandemic.
Tourism is a key industry in Egypt, with receipts accounting for 20% of export value while remittances –
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primarily from the Gulf countries – make up 8% of GDP. The pandemic-induced fall in oil prices as well as the
collapse of the tourism industry on the back of reduced global demand will affect Egypt’s growth prospects in
2020. Nevertheless, Egypt is forecast to avoid recession in 2020 due to its policy changes, high reserves and
relative economic diversification (despite being an oil exporter, crude and refined petroleum collectively account
for 19.6% of exports). Egypt is the only country in North Africa projected to record positive growth in 2020,
placing Egypt in a stronger balance of payments position than its neighbours, including oil-dependent Algeria
and Libya, trade-dependent Tunisia and tourism-dependent Morocco, though debt vulnerabilities remain (see
below).
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Egypt is not eligible for the G20’s Debt Suspension Initiative (DSSI) as the DSSI only applies to a few middleincome
countries and all low-income and least developed-countries defined by the United Nations. But Egypt
received support from the IMF to address the COVID-19 pandemic. In June 2020, the IMF agreed to give Egypt
access to $5.2 billion under a Stand-by Arrangement (SBA) lasting 1 year at an interest rate of about 3%, with
immediate disbursement of $2 billion, to support financing during the pandemic. The program also aims to
ensure previous economic policy changes are not undone, focusing in particular on private sector-supported
growth. Repayment of the SBA will take place over eight quarterly instalments, beginning in September 2023.