Back to the complete issue
Wednesday, 10 April 2019

Finance Ministry, CBE plan to end overdraft account by June

EXCLUSIVE- FinMin, CBE look to clear government’s overdraft by June: The Finance Ministry and the Central Bank of Egypt (CBE) are in talks to clear the government’s overdraft, which had reached EGP 325 bn prior to Egypt signing for the IMF loan in 2016, a senior government official told Enterprise. The ministry will also issue a EGP 40-60 bn securitization bond for the CBE as part of the agreement. This would weigh on public debt and the budget deficit but will result in a more accurate reflection of the economy’s health. The Finance Ministry has been using the overdraft to repay the government’s debt and interest during the past period when the state’s financing gap was too wide.

Clearing overdraft accounts between the CBE and government agencies was part of Egypt’s agreement with the IMF, and the government is now looking at the overdraft owed by several bodies to the CBE, according to our source. Egypt’s improved FX reserves and overall liquidity levels have allowed the breathing room necessary for the move.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.