Egypt to issue first bonds for citizens

• ‘Safe investment’ for Egyptians
• Duration of 18 months
• More bonds planned this year

Egypt is to issue bonds to its citizens for the first time.

The finance ministry will supply the bonds and sukuk (Islamic bonds) on Sunday through post offices across the country, finance minister Ahmed Kouchouk said.

Kouchouk did not specify the value of the bonds but said they would have a duration of 18 months and be a safe investment for Egyptians.

“This issuance comes within the framework of the ministry’s efforts aimed at diversifying government investment tools and expanding the base of citizen investors by providing new and safe investment products that meet the needs of various segments of society,” the minister said on the cabinet’s website this week.

He said post offices would be an outlet for providing this service and selling bonds exclusively through an “institutional partnership aimed at facilitating citizens’ access to this investment tool in all governorates with ease”.

Kouchouk said last week that Egypt would raise $2 billion through new bonds in international markets by the end of June.

Demand for Egypt’s international bonds has picked up as global yields declined, reflecting a better risk outlook and rising investor confidence, he said.

The government is committed to cutting external debt by $1 billion to $2 billion annually by diversifying its funding sources, attracting new investors and extending debt maturities at lower costs, he said.

Kouchouk also said there is a plan to issue bonds worth nearly $2.5 billion in the second half of this year to fund the budget deficit, without specifying the targeted market.

• Egypt’s unemployment falls but gender disparity remains
• Egypt to issue bonds targeted at Gulf expats
• Unchanging fundamentals hold back Egypt’s economic progress

Egypt’s budget shortfall during fiscal year 2024-25, which ended on June 30 last year, nearly doubled to EGP1.2 trillion ($24 billion), the minister said previously.

He estimated revenues at EGP2.6 trillion and spending at EGP3.8 trillion.

Officials have said the deficit would widen under the pressure of interest payments given Egypt’s large foreign debt. Koucouk told reporters that repayment has reduced Egypt’s debt by around $4 billion over the past two years.