Egypt likely to restructure debt in 2024: Morgan Stanley

The restructuring process could be “pre-emptive in nature,” Bloomberg reported on Monday, citing a research note by Morgan Stanley.

Debt restructuring by countries can include extending due dates of debts and maturity dates of sovereign bonds, along with other measures including moving debt from private to public institutions or reducing the yields payable on sovereign bonds, according to Investopedia.

Egypt is required to pay $29.23 billion in external debt service in 2024, $19.43 billion in 2025, and $22.94 billion in 2026, according to data released by the Central Bank of Egypt (CBE).

The country’s total debt reached $164.73 billion by the end of June.

Of this total, Egypt owes $52.9 billion to multilateral institutions, of which the International Monetary Fund (IMF) accounts for 40 percent, or $21.2 billion, according to data released by the Central Bank of Egypt (CBE).

The other major multilateral creditors are the International Bank for Reconstruction and Development ($12.3 billion), European Investment Bank ($4.8 billion), African Development Bank ($2.9 billion), and Arab Fund for Economic and Social Development ($2.2 billion).

Additionally, $46.2 billion is owed to Arab countries, including the UAE ($20.9 billion), Saudi Arabia ($12.2 billion), Kuwait ($7.1 billion), and Qatar ($4.0 billion).

Meanwhile, $8.8 billion is owed to five members of Paris Club countries, including Germany ($2.4 billion), Japan and France ($2.3 billion each), and the UK and the US ($0.9 billion each). In addition, $8.3 billion is owed to China.

Debt service accounted for 60.3 percent of Egypt’s total expenditure during the first quarter of the fiscal year (FY) 2023/2024 which ended in September.