Egypt’s Minister of Finance Announces Local Sukuk Issuances and Economic Growth Strategies
Introduction of Local Sukuk Issuances
Ahmed Kouchouk, Egypt’s Minister of Finance, recently announced plans for local sukuk issuances set to occur in the first half of the current fiscal year. This initiative aims to enhance the country’s financial landscape and diversify the funding tools available to stimulate economic activity. By tapping into sukuk—a form of Islamic financing—Egypt is looking to broaden its fiscal strategies while appealing to a wider range of investors.
Collaborative Efforts in Development Financing
In addition to the sukuk issuances, Kouchouk highlighted the ongoing collaboration with the Ministry of Planning and International Cooperation. This partnership is focused on expanding development financing sources from international partners, essential for sustaining large-scale economic projects. By fostering these relationships, Egypt aims to secure necessary funding and ensure long-term development goals are met.
Commitment to Private Sector Growth
During a panel discussion organized by Al Ahly Pharos Securities Brokerage, Kouchouk emphasized the government’s dedication to empowering the private sector. He underscored the role of private enterprises as integral to Egypt’s economic and financial advancement. The government is actively working to bolster investor confidence by honoring its commitments and enhancing the overall competitiveness of the Egyptian economy. This strategic approach aims to create a stable environment conducive to business growth.
Positive Economic Indicators
Kouchouk shared several key economic indicators reflecting a robust trajectory for the country. The GDP growth rate of 4.7% in the third quarter of the last fiscal year serves as a positive signal, particularly when coupled with an impressive 80% surge in private investment during the first nine months. Notably, sectors such as industrial, tourism, and information and communication technology (ICT) have shown remarkable expansion, accompanied by a substantial 30% increase in exports.
Record Primary Budget Surplus
Despite challenges such as declining revenues from the Suez Canal and energy sectors, Egypt achieved a record primary budget surplus of 3.6% of GDP in the last fiscal year. Kouchouk pointed to a more than 35% boost in tax revenues, accomplished without imposing new taxes. Instead, this growth resulted from policy reforms aimed at simplification and incentives that encourage voluntary tax compliance among businesses.
New Tax Facilities and Streamlining Processes
Building on the success of previous tax initiatives, Kouchouk confirmed that a second package of tax facilities is forthcoming. This package is intended to further strengthen collaboration with the business community and enhance the overall investment climate. Furthermore, efforts will continue to streamline the Value Added Tax (VAT) refund process, making it more integrated and efficient for businesses.
Commitment to Fiscal Policies and Future Reforms
As the new fiscal year unfolds, Kouchouk reaffirmed the government’s resolve to maintain prudent fiscal policies that bolster growth while ensuring financial stability. He indicated that ongoing reforms are expected to introduce innovative financing and investment instruments. This comprehensive strategy is designed to expand economic activities, alleviate public debt burdens, and lengthen the maturity profile of debt.
Through these measures, Egypt aims to create a thriving economic environment, reinforcing its position as an attractive destination for investment and development in the region.
