Egypt is a country that is rich in its history. It is a place where archeological wonders have continued to capture the hearts and minds of many. Egypt is also a country that is in the grip of the worst states of national debt.
This is coming off the April 2017 CBE (Central Bank of Egypt) declaration that the state of the national debt was reaching “critical” points. At the tail end of 2016, it was estimated that Egypt’s debt was at around $67 billion. This is a completely different figure from the $49 billion that was recorded in the end of 2015.
There are people in Egypt’s government that have expressed their opinions regarding the sheer number of government employees that are unsustainable. So those who do work for the government actually fear for their jobs. The experts are all saying that for the chance to start making difficult but positive dents toward lowering the debt, Egypt needs to make the tough decision of increasing its income taxation of citizens and corporations. The continued problem is the fact that for the everyday citizen, this can quite literally push them toward further poverty.
Not All Bad News
Slowly but surely, Egypt is managing to whittle away at its debt to the Paris Club. Members of Egypt’s fiscal office have given reports that the influx of foreign currency into the economy is helping to boost the struggling financial situation as a whole. There are also some foreign investors that are taking advantage of the low costs of operation and moving their businesses to Egypt. While this may not seem all that great for now, the eventual return of investment by allowing foreign presence is sure to come due.
While times are still quite difficult, Egypt’s citizens and her government are still trying their best to make do with a dire situation. There was a projected 6% growth at the start of 2018. While it may not seem like much it is still growth. Any growth would be seeds that can eventually grow toward better economies and fiscal turnaround for Egypt.
The debt that Egypt faces, as bad as it sounds, only shows the trend of getting bigger and bigger. The policies that are being enacted to try to counteract the interest alone are not working. When the job market is not that great, it makes very little sense to squeeze more taxes on the citizens that do not even bring home that much. There is a conflict between the taxation of the lower and middle echelons of their society as opposed to what the higher brackets of society are being taxed.
Only time will tell what policies will actually end up alleviating the pressure of the massive interest that the national debt is accruing.