Egypt has secured more than $900 million in debt swap agreements with Germany, Italy, and China as part of a strategic push to manage its growing debt burden while unlocking financing for development.
Speaking at the Fourth International Conference on Financing for Development (FfD4) in Spain, according to Business Insider’s report, Egypt’s Minister of Planning and Economic Development, Rania Al-Mashat, announced the landmark deals.
She emphasised the importance of such innovative financial instruments in helping developing economies navigate rising debt levels and limited fiscal space.
“These swaps aim to ease our financial pressures and directly support development goals,” Al-Mashat stated, noting that Egypt’s approach could serve as a model for other African countries facing similar debt sustainability challenges.
The minister revealed that external debt among low- and middle-income countries reached $8.8 trillion by the end of 2023, with annual debt servicing costs climbing to $1.4 trillion—nearly double from a decade earlier.
She warned that over 60% of low-income countries are now either in or near debt distress, urging immediate reforms to global financial architecture.
Al-Mashat called for more transparent and responsive global financing mechanisms, including automatic debt suspension during crises and expanded use of Special Drawing Rights (SDRs).
She also encouraged multilateral development banks to embrace blended finance and liquidity tools to help countries tackle climate and development goals.
Egypt’s proactive stance, especially its pioneering deal with China, underscores a broader push among African nations to reimagine debt sustainability through innovation and international cooperation.
Image Credit: Proshare
