Former PM Borrowed $4.5 Billion on Egypt's Tab

Egypt has signed 36 international cooperation treaties in the period between January 2011 and July 2012, making available $5.8 billion in financing, according to a statement issued by the ministry of international cooperation on Monday. Out of that $5.8 billion, $324 million were procured through grants and technical endowments. The largest part ($5.5 billion) was secured through concessional loans, mainly from international finance organisations.

The ministry explained that the $5.5 billion in new loans obtained are within "safe limits" for the Egyptian economy, which amounts to around $333 million monthly, according to the statement. Egypt's external debts reached $33.4 billion by March 2012, a slight drop of $1.5 billion since the start of the 2011/12 fiscal year in July 2011. The statement also explained that new loans will mainly be repaid by the institutions taking benefit from them - such as the metro authority or the electricity authority - but will add an extra burden on the public treasury. $4.8 billion out of the total $5.8 billion were obtained since December 2011, when Prime Minister Kamal El-Ganzouri took charge.

Egypt's petrol and energy sectors received the vast majority of the period's funding at $2.6 billion, from International Islamic, African, Saudi, Kuwait and European finance institutions. The funds were used, among other things, for importing fuel for local consumption and for electricity generation. The rest of the funds were directed towards the food supply sector, which received 19 per cent, mainly used for importing foodstuffs and building giant grain silos and super-sized bakeries.