Egypt is intensifying efforts to boost dollar inflows by introducing a series of new measures targeting citizens living abroad. These include a US-dollar pension plan and a fee for those who wish to clear their military service obligations.
Pension plan
The Financial Regulatory Authority introduced the new pension plan on Monday. It allows Egyptians abroad to set up pension funds for a minimum of $500. Once they reach the age of 50, pensioners will receive monthly payments in dollars for 10 to 15 years.
In 2018, there were around 8.9 mn Egyptians who lived abroad. Meanwhile, the domestic population has so far reached 105 mn according to recent figures.
Read: Egypt’s economy to grow by 4.2 percent, says Morgan Stanley
Military obligations
Egyptian expatriates who have defaulted on their military service can also rectify their status. They can do so by paying either $5,000 or 5,000 euros within a one-month window that also commenced on Monday.
In Egypt, most men between the ages of 19 and 30 need to render military service. Those who traveled for education, medical treatment, or work received temporary exemptions. However, many of them ended up remaining on foreign shores.
Military delinquents will not be able to renew their passports.
This military amnesty is also applicable to men aged over 30 who failed to comply with the service requirement.
On Tuesday, the foreign ministry announced a WhatsApp number and email address that will cater to inquiries about the initiative. They are keen to monitor it 24/7, urging draft evaders abroad to register immediately.
Meanwhile, applicants can opt to pay the fee to the Abu Dhabi branch of Egypt’s state-owned Banque Misr.
Heightened efforts
Apart from the said measures that can help Egypt boost dollar inflows, state-owned banks also started selling high-interest dollar-denominated bonds in recent months.
In May, the country also began incentivizing foreigners in Egypt, offering temporary residence to people who will buy property for at least $50,000. They can also be awarded the same privilege if they deposit $50,000 in state-owned banks.
Last year, the government also gave tax rebates to expatriates who paid car import fees in hard currency.
Egypt has been borrowing funds to cope with the Covid-19 pandemic and the Ukraine crisis. According to official data, external debt jumped from under $40 bn in 2015 to $165.4 bn by the end of March 2023.
Repayments worth at least $50 bn are due over the next few years.
While Egypt has heightened its efforts to bolster foreign currency assets, data from its central bank shows that Q1 remittances dropped significantly compared to the same period in 2022. Remittances serve as the country’s biggest source of foreign currency inflows.
For more economy-related news, click here.
