Skip to main content

Egypt’s debt crisis impacts other African credits, Goldman Sachs warns

As bond yields rise in Egypt, so have yields for sovereign bonds for Angola, Kenya, Nigeria and Senegal.
Hassan Abdallah Egypt Central Bank Governor

Egypt’s debt crisis and falling credit outlook are impacting the economies of high-yield sovereigns elsewhere in Africa, global investment bank Goldman Sachs has warned.

Egypt was badly impacted by the Russian invasion of Ukraine in February 2022, having relied on wheat imports and tourism revenues from both countries. Overbearing state and military interference in business has also deterred investment in the country and subsidies have shrunk the state budget. 

Over the last year or so, the Egyptian pound has tumbled, inflation has increased and foreign currency has dried up. Inflation has been increasing in Egypt over the last year with a 33.9% rise in March despite the central bank raising interest rates. 

Egypt has around $39 billion of outstanding debt in dollars and euros, including $3.3 billion due in 2024, according to data compiled by Bloomberg. In February, a ratings agency downgraded Egypt’s credit rating, changing its outlook from stable from negative.

On Wednesday, extra yield investors demand to own Egypt’s sovereign bonds instead of US Treasuries, considered the safest investment, spiked by a record 1,258 basis points, Bloomberg reported. Bond yields have also been rising in Angola, Kenya, Nigeria and Senegal.

“Egypt has significantly higher short-term external vulnerabilities than the rest of these sovereigns,” Goldman strategists wrote in a note to clients on Thursday.

“Moreover, this group of sovereigns benefit from external anchors, such as relatively high oil prices in Angola, Gabon and Nigeria, or are backed by IMF programs: Kenya and Senegal.” 

Africa’s high yielding countries tended to be “very highly correlated to Egypt’s,'" the analysts said. 

“But putting the underperformance of these sovereigns into context, the current market pricing suggests that parts of [emerging market] credit are pricing a higher probability of a very negative state of the world as a whole.”

Al-Monitor has contacted Goldman Sachs for further comment.

Egypt is in talks with the International Monetary Fund to provide a $3 billion bailout to help pull the country from its economic crisis. The fund has said that the Arab country must enact more wide-ranging reforms before it will carry out the initial review of the rescue program. In December, the IMF approved its fourth loan to the debt-ridden North African country in six years.

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in


The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.


What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

We also offer team plans. Please send an email to and we'll onboard your team.

Already a Member? Sign in