Egypt’s Minister of Planning, Dr. Rania Al-Mashat, participated in a high-level ministerial dialogue on “Reducing Financing Costs and Enhancing Debt Solutions for Development”, held as part of the United Nations Economic and Social Council (ECOSOC) Development Finance Forum in New York. This forum is a preparatory event leading up to the Fourth International Conference on Financing for Development scheduled for June in Seville, Spain.
Promoting Effective International and Domestic Cooperation to Achieve Development Goals
In her speech, Dr. Al-Mashat emphasized the critical importance of collaborating with national stakeholders, as well as international partners, to support the achievement of global development goals. She underlined the necessity for countries to clearly announce their reform programs in a transparent manner, which not only enhances credibility but also helps in reducing financing costs. According to her, a lack of clarity leads to higher financing costs, stressing the priority of sending clear messages about reforms and ensuring the private sector’s involvement in the process.
The Need for Private Sector Participation in Financing Sustainable Development
Dr. Al-Mashat highlighted the enormous financing required to achieve Sustainable Development Goals (SDGs) and address climate action. She emphasized that such financing can only be achieved through genuine private sector participation. However, this participation will only materialize if governments provide a clear, competitive, and transparent investment environment that attracts private capital.
Addressing Financing Challenges and Enhancing Investment Opportunities
The Minister also pointed out that recent global economic developments have constrained financial space, particularly for concessional development financing. Despite the availability of mixed financing tools and grants, she noted that one of the main barriers to accessing financing is the lack of attractive projects. Dr. Al-Mashat stressed the importance of cooperation and knowledge exchange among countries to benefit from replicable development experiences, citing the successful launch of Egypt’s “Naufy” platform. This platform has become a model for national investment platforms that attract private sector investments through clear and incentivizing projects.
Egypt’s Commitment to Economic Reforms and International Partnerships
Dr. Al-Mashat reassured the international community of Egypt’s commitment to continuing its economic and structural reforms. She affirmed that the Egyptian government remains focused on addressing gaps in financing SDG goals, promoting private sector involvement, and enhancing the country’s cooperation with international financing institutions. Egypt’s strong relationships with international financial institutions and development partners enable the country to maximize the benefits from development financing and technical support.
Debt Challenges and Innovative Debt Swap Mechanisms
Turning to the challenge of rising debt, which is becoming a significant issue for many developing countries, especially in Africa, Dr. Al-Mashat emphasized the urgent need to mobilize domestic resources. This can be achieved by developing financial markets, increasing private sector investments, and optimizing the use of national assets. She also pointed out the importance of continuing economic reforms that reduce financing costs and accelerate sustainable development.
Dr. Al-Mashat highlighted Egypt’s efforts over the past few years to strengthen partnerships with the international community for the expansion of debt swap programs with bilateral partners. These programs allow Egypt to redirect debt repayments into development projects with significant economic and social impacts. She further noted that debt swaps have become an innovative tool that alleviates the debt burden on countries and can even improve their credit ratings. The global economic situation has made the concept of debt swaps more acceptable, with markets now more willing to embrace these financial tools than in the past.
The Path Forward: Transparency and Continued Reform
Concluding her remarks, Dr. Al-Mashat stressed the importance of governments continuing to push forward their reform agendas with transparency and clarity. She emphasized that there are many reforms related to mobilizing domestic resources that could open up greater financial opportunities. She also reiterated the role of international financial institutions and multilateral development banks as crucial partners in mobilizing concessional financing, particularly for the private sector, provided that projects are well-prepared and plans are clear. Finally, she reinforced that debt swaps have proven to be an effective tool in reducing debt burdens while supporting developmental projects.
