Al-Mashat:
• Integrated and innovative solutions are essential for developing countries to preserve development gains and invest in human capital.
• Egypt implemented a proactive approach to promote sustainable debt management, leveraging strategic partnerships and innovative financing tools.
• We are implementing debt-swap programs with Germany and Italy exceeding $900 million and signed the first-of-its-kind debt-swap memorandum with China.
• The Integrated National Financing Strategy (INFS) provides a roadmap for mobilizing sustainable financing to bridge development gaps.
• We look forward to a more resilient and development-focused global financial system and the adoption of more equitable principles from international lenders.
H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, participated, as a keynote speaker, in a session titled "Debt Solutions for Resilience and Reform: Financing Agenda 2030 in Africa and Beyond”.
The session was organized by the Ministry of Finance and the United Nations Development Programme (UNDP), with the participation of H.E. Dr. Mostafa Madbouly, Prime Minister, and Mr. Ahmed Kouchouk, Minister of Finance.
It was held as part of the Fourth International Conference on Financing for Development (FfD4) in Spain.
The session focused on the importance of integrated solutions to the debt distress facing many developing countries.
By 2023, external debt for low and middle-income countries reached a record $8.8 trillion, with short-term debt growing faster than long-term obligations.
In her speech, H.E. Dr. Rania Al-Mashat pointed out that low and middle-income countries spent $1.4 trillion on debt service in 2023. Excluding China, this burden amounted to nearly $1 trillion, double what it was a decade ago.
She added that borrowing costs have increased significantly, especially in 2023, as low and middle-income countries faced the highest interest rates since the global financial crisis. More than 60% of low-income countries are now in debt distress or at high risk. Without intervention, global public debt is expected to exceed 100% of global GDP by 2030.
H.E. Dr. Al-Mashat mentioned national responses, highlighting that Egypt has taken a proactive approach to enhancing sustainable debt management and reform, leveraging innovative tools and strategic partnerships. These include implementing debt-swap programs with Germany and Italy exceeding $900 million and signing a first-of-its-kind agreement with China.
These programs have successfully redirected repayment obligations toward priority sectors, including health, education, and climate action, aligning external financing with national development goals.
H.E. Dr. Rania Al-Mashat noted that, to complement these efforts, Egypt’s Integrated National Financing Strategy (E-INFS) was launched. This strategy serves as a model for mobilizing sustainable financing to bridge development gaps and mitigate future financial and debt risks.
She also pointed to the state’s endeavors to swap debt for investments through the historical agreement with the United Arab Emirates, which stimulates efforts to attract foreign direct investment while simultaneously reducing financing burdens.
In parallel, Egypt has strengthened its leadership in green finance by issuing green bonds and is exploring further sustainability-linked financing instruments and blue finance to diversify its funding sources and better integrate environmental and social sustainability into its debt portfolio.
H.E. Minister Al-Mashat emphasized the need for a more resilient and development-focused global financial system, prioritizing a comprehensive reform agenda with innovative, transparent, and equitable approaches to sovereign debt management.
She also stressed the importance of strengthening inclusive mechanisms for sovereign debt resolution as a key driver for achieving sustainable development and establishing fair processes – based on multilateral frameworks – that address the limitations of the current fragmented approach to debt settlements.
H.E. Dr. Al-Mashat also underscored the necessity of adopting globally accepted principles for responsible lending and borrowing, including automatic payment freezes in times of crisis, and focusing on reducing the cost and risk of borrowing for developing countries through expanding the use of innovative instruments such as SDG-linked bonds. Countries should also be encouraged to utilize debt-for-climate and debt-for-development swaps, provided they are designed equitably and are consistent with national development priorities.
In connection with the recommendations from the UN Secretary-General's expert group, which highlighted the importance of establishing a platform for sharing experiences and technical support to leverage innovative financing mechanisms and debt-swap programs for development.
H.E. Dr. Rania Al-Mashat shed light on Egypt's experience in balancing its national priorities with utilizing the financial tools available from international financial institutions.
In 2022, Egypt launched the Country Platform for the "NWFE" (Nexus of Water, Food and Energy) Program, which aims to mobilize development financing to enable private sector participation in development projects, particularly adaptation and mitigation projects, through innovative financing mechanisms and investment guarantee tools. Additionally, between 2020 and May 2025, Egypt successfully mobilized approximately $15.6 billion for private sector financing, of which $4 billion was directed to participants in the NWFE Country Platform projects.
H.E. Minister Al-Mashat asserted that updating the Debt Sustainability Analysis (DSA) is a crucial process for a more just assessment of developing countries' ability to meet their current and future financial obligations without incurring a debt crisis, as it reflects an evaluation of the countries' macroeconomic and financial situations and the efficiency of their debt management.
H.E. Dr. Al-Mashat added that multilateral development banks can boost their liquidity and financing capacity by increasing the use of Special Drawing Rights (SDR) from member states through mechanisms such as hybrid capital instruments and liquidity support facilities, among other integrated and innovative solutions that can enhance the ability of these institutions to address global challenges such as climate change.
In concluding her speech, H.E. Dr. Al-Mashat reiterated that the FfD4 is a pivotal opportunity to stimulate reforms in the global debt architecture and push for equitable solutions that align sovereign debt management with sustainable development goals.
UN Conference on Trade and Development (UNCTAD) Forum
On another note, H.E. Dr. Rania Al-Mashat participated in the forum organized by the United Nations Conference on Trade and Development (UNCTAD) to review the global debt situation.
During her speech, Dr. Rania Al-Mashat commended the UNCTAD report, explaining that it not only highlights the debt crisis but also provides a realistic and practical implementation plan to deal with the crisis, representing a significant development in the nature of the discussion around public debt.
H.E. Dr. Al-Mashat emphasized the importance of countries that have had successful experiences in debt restructuring or debt-swap agreements sharing their experiences with the international community, not only in terms of results but also in terms of the internal governance that contributed to their success. She noted that managing the public debt file is not limited to one ministry or entity but requires coordination among many parties within the state, making governance a crucial element in these experiences.
H.E. Minister Al-Mashat also reaffirmed that creditor entities differ in nature, as do the mechanisms through which agreements are reached. This requires debtor countries to possess strong technical and institutional capacities to negotiate effectively, not only for a single deal but to build a series of deals linked to long-term development pathways.
H.E. Dr. Al-Mashat highlighted the significance of technical support not just as training or advice, but as tangible financial value, as implementing these initiatives requires real resources. She noted that existing tools and mechanisms within various institutions and entities address these types of issues. She added that combining these efforts within a joint platform complements what already exists, creating real added value for all parties, both debtor countries and creditor entities.