Amid the bustling streets of Cairo, Ashraf Arabi, the visionary President of the Institute of National Planning (INP), has announced a pioneering initiative. INP, a powerhouse of strategic thinking, has meticulously crafted a far-reaching study aimed at ushering in a unified public debt law for Egypt.
In a candid conversation with Daily News Egypt, Arabi passionately expressed the institute’s staunch support for instating a unified public debt law. He underscored its significance, emphasizing that Egypt, until now, has operated without such a regulatory framework. The proposed legislation is poised to introduce an unprecedented level of governance and oversight by the Egyptian Parliament into the local debt management process.
Arabi articulated the potential benefits of this groundbreaking law, foreseeing a more judicious approach to borrowing and a regulated issuance of treasury bonds. If enacted, the law would act as a safeguard, setting clear standards and stringent criteria for projects seeking financial support, with a particular focus on generating foreign currency.
The INP, spearheading this transformative endeavor, has diligently compiled the comprehensive study, submitting it to both the Egyptian Parliament and relevant governmental bodies. Arabi affirmed that the executive decision of the government would hold sway, underscoring the institute’s commitment to shaping Egypt’s financial future.
In a parallel development, the institute has recently unveiled a research paper addressing the sustainability of government debt. The paper proffers a set of crucial measures and recommendations to uphold the sustainability of government debt, advocating for a balanced economic growth trajectory. It advocates for an active government policy on state ownership, bolstering the private sector’s role in economic activities, and fostering a flexible and competitive monetary policy to invigorate the private sector’s capacity for investment and export.
The meticulously reviewed research paper calls for transparency and disclosure rules, aiming to distinguish between government and non-government debt. It urges the efficient coordination of fiscal and monetary policies concerning debt management to ensure its sustainability and reduction to desired levels.
Arabi, with an insightful perspective, elucidates that the key indicator for measuring debt sustainability in Egypt is the debt service ratio for commodity and service exports. He emphasizes the need for vigilant monitoring, citing an increase in this ratio as an early warning sign.
Underlining the urgency for radical structural reforms, Arabi identifies three main axes: increasing production, exports, and strategic investments in human resources. Acknowledging the initial steps taken by the Egyptian government, he anticipates an accelerated implementation pace in 2024, paving the way for a transformative era in Egypt’s economic landscape.
