Few of its large-scale projects are bringing in more hard cash, and since the start of the Ukraine crisis and as global borrowing prices have risen, international investors have made matters worse by avoiding Egypt and other emerging countries.
The government claims it will make repayments, but it has not implemented the fundamental improvements to its economy that have been long promised, and its attempt to generate money by selling state holdings has been unsuccessful for almost a year.
Longtime proponents of a more flexible currency include investors. However, despite a promise to the International Monetary Fund to release it under a $3 billion bailout package negotiated in December, Egypt's pound has not moved against the dollar for three months.
Egypt has reduced net foreign assets in its banking system by more than $40 billion in the past two years amid a foreign exchange shortage, some of which was used to support the pound.
In the meanwhile, the state's finances have been a source of concern for investors, according to Prime Minister Moustafa Madbouly. "I affirm that the Egyptian state has not failed and will not fail to pay any of its international obligations," he had said back in April. Egypt declared that it will sell assets, including $2 billion by the end of June, to pay off its foreign debt and raise money.
The tourist industry and transit fees through the Suez Canal are two of Egypt's biggest sources of foreign exchange. But a third, remittances from Egyptians working abroad, have decreased as more people, according to bankers, have turned to the black market to repatriate their money.
According to central bank figures released this week, payments are due for $2.49 billion in short-term debt in June, $3.86 billion in short-term borrowing, and $11.38 billion in longer-term debt in the second half of 2023.
Some of it is owing to benevolent creditors, including Egypt's Gulf allies. They have deposited about $30 billion with Egypt's central bank, and based on previous behavior, they are likely to roll over that amount.
The IMF, to whom it must pay $2.95 billion by the end of 2023, and foreign bondholders, to whom it owes $1.58 billion, are among the less forgiving lenders to whom the country owes a debt. The succeeding years' payback plan is just as onerous.
The $4.5 billion in repayments to the IMF and foreign bondholders alone represents more than half of Egypt's $8 billion in yearly Suez Canal revenue.
Less than a year after general-turned-politician Abdel Fattah al-Sisi was elected president in March 2015, a succession of megaprojects including a new capital city and three power plants were planned. It was at this time that Egypt's borrowing binge began.
Multilateral lenders, foreign governments, and institutional investors went on board when the IMF made assurances in its arrangements in 2016 and 2020. In addition, Egypt, which last year hosted the COP27 climate meeting, has benefited from a surge of green finance.
According to figures from the central bank, Egypt's foreign debt increased from less than $40 billion in 2015 to $162.9 billion by December 2022. The amount borrowed in the final quarter of 2022 alone increased by $8 billion.
By making at least 54 orders for weapons between 2015 and 2019, Egypt rose to become the third-largest arms importer in the world, according to the Stockholm International Peace Research Institute (SIPRI).