To address the country’s ongoing economic challenges, Egypt will be allocating a 174 square kilometer plot on the Red Sea coast to the finance ministry on Tuesday 10 June according to reports, which will be utilized for Islamic bond issuances (financial certificates that represent ownership in a portfolio of assets, rather than a debt obligation like traditional bonds), part of a broader strategy to lower the country’s public debt.
While no detailed plan has been revealed for the land’s use, the allocation comes in the wake of a USD 35 billion (EGP 1 trillion) deal signed with the United Arab Emirates last year to develop a similar-sized tract along the Mediterranean coast.
Since then, Egypt has been actively seeking additional large-scale investments to support its economic recovery by engaging in discussions with financial partners in Saudi Arabia, Qatar, and Kuwait.
In conjunction with this land allocation, Egypt plans to issue USD 2 billion (EGP 99 billion) in sukuks (Islamic financial certificates, similar to bonds, that comply with Sharia law by avoiding interest) in 2025.
Finance Minister Ahmed Kouchouk highlighted this financial strategy in April and emphasized the government’s commitment to finding innovative solutions to its economic issues.
The issuance of sukuks is expected to attract a diverse range of investors, bolstering Egypt’s financial landscape, according to sources.
According to the Central Agency for Public Mobilization and Statistics (CAMPAS) July 2023 report, Egypt’s economy is facing serious challenges despite some positive signs. While foreign reserves are up and manufacturing activity is improving, inflation has skyrocketed to 35.7 percent, making it harder for people to afford everyday items.
The country is facing a sharp drop in export orders and natural gas exports, reducing its income. In June 2023, new export orders fell by 11 percent from the previous month and 12 percent from the previous year, which highlights global market challenges that may hurt export revenues and the trade balance.
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