The Egyptian Cabinet on its weekly meeting on Thursday approved the activation of the Unified Public Finance Law to set an annual limit for the general government’s debt, including the government’s 59 economic entities.
According to a government statement, the law will be activated by establishing dedicated units in the Finance Ministry, and dedicated accounting units in all economic entities.
The law, first issued in February 2022 and substantially amended in March two years after its issuance, aims to set a ceiling for the debt of budget agencies and economic entities in Egypt, which cannot be exceeded except with the approval of the President, the Cabinet, and the House of Representatives.
The state is working to reduce debt rates and put them on a sustainable downward path, and reduce the debt-to-GDP ratio to less than 80 percent over the next three years.
Previously, the state budget did not include 59 economic entities, but the government says that is seeking “to enhance the governance and discipline of the state’s financial system.”
The law prohibits administrative bodies from being bound by any expenses or concluding any contracts, financial agreements, protocols, initiatives, or others that entail additional financial obligations or burdens.
It also prohibits representatives of Finance Ministry from approving the disbursement of any sums before ensuring that there is a financial commitment, or that the project is included in the economic development plan.
The law also requires that the Finance Ministry’s opinion be sought on draft laws or decisions that would add financial burdens to the state’s public treasury.
Egypt’s external debt fell to US$152.9 billion by the end of June 2024, according to data from the Central Bank of Egypt, with long-term external debt at US$126.8 billion, while short-term debt reached US$26.24 billion.
Egypt’s domestic debt fell by the end of June to LE8.72 trillion, compared to LE8.965 trillion during the first quarter of this year, a decline of 2.7 percent.
Edited translation from Al-Masry Al-Youm
