Inside the wood-panelled Egypt Post office in downtown Cairo, the morning rush is no longer just for pensions or utility bills. Small-scale savers, holding dog-eared bank books and national IDs, are queuing for a direct stake in the state.

“I prefer the monthly return,” says one retiree, waiting to subscribe to the new 17.75% Citizen Bond. “It’s safer than the market and pays more than my old savings account.” In just 48 hours, these individual investors have funnelled nearly EGP 350m into the state’s coffers, according to a source at the National Post Authority—marking a significant shift in Egypt’s fiscal architecture.

What is the Egyptian Citizen Bond and How Does the 17.75% Yield Work?

The “Citizen Bond” is a tactical strike against the high cost of institutional borrowing. By offering a net annual yield of 17.75% over an 18-month tenor, the government is effectively cutting out the middleman. Traditionally, the state borrows from commercial banks, which must account for “Reserve Requirements” (non-interest-bearing deposits at the Central Bank) and their own profit margins. This “banking tax” has historically driven up the cost of debt for the Treasury.

By going direct to the retail market via the Egypt Post network, the Ministry of Finance bypasses these institutional premiums. The move is vital for debt sustainability; interest payments consumed a staggering 92% of total public revenue in the first half of the 2025-2026 fiscal year. Between July and December 2025 alone, interest costs surged 34.6% to EGP 1.26tn.

Why is the Ministry of Finance Bypassing Commercial Banks for Sovereign Debt?

The objective is not merely to reduce the debt burden, but also to mitigate risk by expanding the investor base. Currently, the banking sector holds a concentrated portion of government debt. By diversifying to include the “man on the street,” the Treasury reduces its sensitivity to liquidity pressures within the banking system.

The 17.75% yield is specifically calibrated to be higher than standard savings accounts while remaining cheaper for the government than the gross rates demanded by banks, which often include a premium to cover the cost of the 14% mandatory reserve ratio held at the Central Bank of Egypt.

Impact on the Banking Sector: Will the EGP 7.74tn Savings Pool Pivot?

The scale of the government’s ambition is matched only by the size of the target. Data from the Central Bank of Egypt reveals that individual deposits in local currency reached EGP 7.74tn by the end of December 2025—a 26.8% annual increase.

  • The Opportunity:Retail savings represent 80.7% of all non-governmental deposits.
  • The Strategy:Attract at least 5% of these bank-held savings into direct government debt.
  • The Benefit:Increasing financial inclusion while lowering the weighted average cost of debt.

Reducing the EGP 1.26tn Interest Burden through Direct Lending

The subscription period remains open until 8 March, but the early momentum suggests that the Egyptian public is ready to move beyond passive saving. By democratizing access to sovereign debt—previously the domain of big banks—the state is not just funding its deficit; it is attempting to rewire the relationship between the citizen and the national economy.

If successful, the Citizen Bond will serve as a blueprint for future issuances, potentially lowering the debt-to-GDP ratio as the government seeks more cost-efficient ways to manage its EGP 1.26tn annual interest bill. The kicker for the Ministry is clear: every pound subscribed through a post office is a pound that doesn’t carry a banking markup, providing a rare win-win for both the state’s balance sheet and the citizen’s pocket.

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