Egyptian MP warns against continued borrowing saying future generations will be swamped in debt

Egyptian MP warns against continued borrowing saying future generations will be swamped in debt
The Egyptian lawmaker said the country cannot continue borrowing money, as the country's debt problem spirals.
2 min read
14 June, 2021
As of June 2020, Egyptians will carry a portion of the national debt equivalent to 10,000 Egyptian pounds according to Imam. [AFP/Getty Images]

An Egyptian lawmaker warned Sunday against the financial repercussions Cairo faces if it continues borrowing money, saying it means that every citizen born will carry a portion of the national debt equivalent to 10,000 Egyptian pounds.

Mohamed Abdel-Moneim Imam’s comments came as the government discussed the state's budget for the new fiscal year 2021-2022, which he rejected, aimed at covering a fiscal deficit that currently stands at 6.6 percent.

Imam warned future generations were in danger of being swamped by the national debt if the Egyptian government continues borrowing from abroad.

He added that current policies were not in line with economic reforms but merely "attempts to raise funds to cover the deficit".

"The average share of the total public debt per capita amounted to 10,228 (Egyptian) pounds as of 30 June 2020, which is an increase of 53.5 percent in the last six years alone," he said.

"Every newborn in the state owes this amount, and it is expected to increase with the continuation of borrowing and debt policies."

Cairo reached an agreement with the International Monetary Fund (IMF) in November 2016 to secure a $12 billion loan over three years, while targeting more borrowing totalling $7 billion annually.

Egypt's economy, like elsewhere, was impacted by the global pandemic, especially as the country relies heavily on tourism, which, along with Suez Canal revenues and remittances from Egyptian expatriates, are the primary sources of foreign currency.

The country had reeled under years of political turmoil and militant attacks since the 2011 revolution.

Nearly a third of the country’s more than 100 million people live below the poverty line.