Egypt Allocates 26,690 Red Sea Feddans to Support Public Debt Reduction
A presidential decree hands the land to the finance ministry as Cairo works toward a 69.5% debt-to-GDP target and prepares the ground for sovereign sukuk issuance.
Egypt has allocated about 26,690 feddans of state-owned land in the Red Sea governorate to the Ministry of Finance, a move tied to reducing public debt and preparing sovereign sukuk issuance.
President Abdel Fattah El-Sisi issued the allocation decree. Presidential Decree No. 448 of 2026 amends Article 1 of Presidential Decree No. 222 of 2026, which had already assigned the same land to the finance ministry.
Prime Minister Mostafa Madbouly restated the debt target at a government meeting on Wednesday: a public debt-to-GDP ratio of about 69.5% by 2030, a figure taken from the Egypt Forum 2026 recommendations.
He asked ministries and government agencies to build one coordinated plan that accelerates the reduction, lowers debt-servicing costs and frees fiscal space for priority spending. The plan needs detailed responsibilities assigned to each ministry and agency, and it will be submitted to El-Sisi.
The forum recommendations go further than the headline ratio. They set ceilings for public debt, external debt and sovereign guarantees, and call for closer coordination among government entities to reach the 2030 target faster.
Finance Minister Ahmed Kouchouk described an improving trajectory. External debt held by general budget entities fell by an amount equal to about 3.9% of GDP in FY2025-26, he said, and their debt-to-GDP ratio dropped by about 14% between June 2023 and June 2026. The decline began in FY2023-24.
The burden is still heavy. Ministry indicators put debt servicing at 10.6% of GDP in FY2025-26, equal to 49.1% of total government expenditure. Budget-sector debt was estimated at 82.1% of GDP for the same year. Egypt is trying to ease that load.
The land allocation feeds a financing channel built over the past few years. Egypt's Sovereign Sukuk Law, issued in 2021, allows sukuk to be backed by usufruct rights over state-owned assets, which can be sold or leased to support an issuance. Structures must satisfy applicable legal and Islamic finance requirements. The Egyptian Financial Company for Sovereign Taskeek, wholly owned by the Ministry of Finance, oversees the assets used in these issuances.
Egypt sold its first sovereign sukuk in February 2023, raising $1.5 billion through a three-year Ijara structure within a broader $5 billion programme. Orders reached about $6.1 billion, more than four times the amount offered, from more than 250 investors.
Handing land to the finance ministry does not shrink the debt on its own. It turns idle state acreage into collateral that can be converted into a tradable instrument, which is why the decree and the 2030 target are being pursued together. Whether the ratio falls fast enough still depends on the cost of servicing what Egypt already owes.
