By Ebi Kesiena
Egypt plans to complete another debt swap with its European partners before the end of 2025, Planning Minister Rania al-Mashat has said, adding that more similar transactions are expected next year.
The arrangement will involve exchanging high-cost debt for loans at lower interest rates, with the savings directed towards development projects or other agreed purposes. It forms part of roughly $1 billion worth of debt swaps Egypt has carried out with bilateral partners such as Germany and Italy since the 1990s.
“Debt swaps are a way to do liability management,” al-Mashat told Reuters on the sidelines of the annual International Monetary Fund and World Bank meetings in Washington. “They are a way to create more fiscal space and show that collectively our national goals are aligned with international goals, so we expect more debt swaps,” said al-Mashat, who oversees planning, economic development, and international cooperation.
She did not disclose further details about the upcoming transaction.
The minister also said the government expects the Suez Canal’s contribution to economic growth to return to positive territory from mid-2026 after years of decline.
The canal has faced disruptions due to attacks on shipping by Yemen’s Houthi militants amid the ongoing conflict in Gaza, causing a significant drop in revenue. The Iran-backed group has claimed the attacks are meant to target cargo bound for Israel but has affected wider global trade routes through the waterway.
“My expectation would be that that contribution (to growth) is at least zero, not negative anymore by June of next year,” al-Mashat told Reuters. “We might be surprised on the upside again, depending on how fast trade can come through the canal.”
