Egypt: Al-Sissi approves issuance of tax sukuk to ease public debt

Egyptian President Abdel Fattah al-Sissi approved on Monday, August 10, the issuance of tax sukuk—instruments subscribed by taxpayers whose amounts can be deducted from their future tax obligations—aimed at reducing the state's financing needs and containing the cost of debt service. According to Financial Afrik, the decision was made during a meeting held in New Alamein with Prime Minister Mostafa Madbouly and Finance Minister Ahmed Kouchouk, dedicated to reviewing the country's economic and financial situation. The exact amount and schedule of the issuance were not disclosed. This new instrument differs from the international sovereign sukuk issued by Egypt in February 2023—a first issuance of 1.5 billion dollars targeting foreign investors—since it targets the savings of domestic taxpayers this time. For the Egyptian state, engaged since 2022 in an 8 billion dollar program with the IMF (Extended Fund Facility revised in 2024), the measure aims to diversify domestic funding sources in the face of debt service absorbing a growing share of the budget. For taxpayers, the instrument offers an investment alternative backed by a future tax reduction. Internally, this choice reflects the Madbouly government's desire to mobilize domestic savings rather than international markets, against a backdrop of pressure on the Egyptian pound.