Dr. Rania Al-Mashat Conveys Several Messages to the International Community on Reducing Financing Costs and Expanding Debt-for-Development Swap Solutions to Alleviate Burdens on Developing Countries

H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, participated in a high-level ministerial dialogue on “Lowering Borrowing Costs and Advancing Development-Oriented Debt Solutions”.

This comes as part of the Financing for Development Forum organized by the United Nations Economic and Social Council (ECOSOC) in New York, within the preparatory meetings for the 4th International Conference on Financing for Development, scheduled to be held in Seville, Spain, next June.

During her speech, H.E. Dr. Rania Al-Mashat emphasized the significance of cooperation with various national parties, as well as cooperation with international partners, to support the achievement of development goals.

H.E. Dr. Al-Mashat pointed out the necessity for countries to be clear in announcing their reform programs, which enhances credibility and contributes to reducing borrowing costs, as their absence leads to an increase in these costs. Therefore, conveying clear messages about reforms and emphasizing private sector engagement has become a top priority.

Regarding the required financing volume, H.E. Minister Al-Mashat indicated that the financing needed to achieve the Sustainable Development Goals (SDGs) and climate action is enormous, and this financing can only be mobilized through genuine private sector participation. However, this participation will only materialize if governments provide a clear and transparent competitive environment that attracts private sector investments.

On how to provide this financing, the Minister of Planning, Economic Development and International Cooperation highlighted that global economic developments have caused a tightening of fiscal space, especially in terms of concessional development financing.

H.E. Dr. Al-Mashat reiterated that despite the availability of blended finance instruments and grants, one of the challenges hindering access to financing is often the lack of bankable projects. This highlights the importance of cooperation, knowledge sharing between countries, and leveraging replicable development experiences.

H.E. Minister Al-Mashat pointed to the success of the national efforts in launching the “NWFE” program, which has become a model for country platforms that attract investments through clear and private sector-stimulating projects.

Regarding national efforts in economic and structural reform, H.E. Dr. Al-Mashat affirmed the government’s commitment to continue the economic reform path, transparency in development cooperation projects, addressing the SDGs financing gaps, and encouraging private sector participation.

H.E. Dr. Al-Mashat underscored that Egypt has strong and distinguished relationships with international financing institutions and development partners, enabling it to maximize the benefits of development financing resources and technical support.

H.E. Dr. Al-Mashat then reviewed the rising debt, which has become a challenge facing many developing countries, particularly in Africa, consuming a significant portion of financial resources for interest payments.

H.E. Minister Al-Mashat pointed out that to overcome these problems, it is necessary to increase efforts to mobilize domestic resources by developing capital markets, increasing private sector investments, maximizing asset utilization, and proceeding with reforms that contribute to reducing financing costs and advancing the development path.

H.E. Dr. Al-Mashat outlined that Egypt, over the past years, has strengthened its partnership with the international community to expand debt-for-development swap programs with bilateral partners, redirecting the equivalent of these debts to projects with developmental impact in multiple sectors.

H.E. Dr. Al-Mashat noted that the debt swap mechanism has become an innovative tool that contributes to alleviating debt burdens on countries and improving their credit ratings. She affirmed that with current global developments, there is greater acceptance of debt swaps or restructuring in general, as markets have become more receptive to these instruments compared to the past.

H.E. Dr. Rania Al-Mashat concluded her speech by reaffirming the importance of governments continuing to boost reform agendas with clarity and transparency, more than ever. Many reforms related to mobilizing domestic resources can open up greater fiscal space.

H.E. Minister Al-Mashat confirmed that international financial institutions and multilateral development banks remain essential partners in mobilizing financing, especially for the private sector, provided projects are ready and plans are clear. She also highlighted the proven effectiveness of bilateral debt swaps.

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