The Egyptian government has recently been preparing to offer a third issue of the “Citizen Bond” through post offices in the various governorates, with the aim of providing liquidity that contributes to paying off debts, and of providing citizens with savings alternatives to bank certificates.

The Citizen Bond aims to raise liquidity to cover the budget deficit, while the government regards it as an opportunity for citizens to invest directly and safely in government securities, as banking expert Hany Abu El-Fotouh tells Zawia3.

The Ministry of Finance had offered, on 22 February last, the “Citizen Bond” to individuals through post offices, with a fixed annual return (17.75%) paid monthly for 18 months, as a safe savings instrument with a fixed periodic return, according to statements by government officials, to give citizens an opportunity to invest directly in government securities with ease.

On 4 April last, the second offering of the Citizen Bond was issued, while the value of sales in the second offering reached about EGP 2 billion, with the Ministry of Finance intending a third offering along with expanding the sale of the Citizen Bond through banks to widen the base of beneficiaries, without targeting a specific amount from the offering.

Minister of Finance Ahmed Kouchouk, meanwhile, stated on 29 March last, about 19 days after the first offering ended, that sales of the Citizen Bond had reached about EGP 5.7 billion, describing demand for subscription to the bonds as “large” after it achieved notable proceeds in 3 weeks, according to his statements. The first offering of the Citizen Bond ended on 10 March last, after subscription to it began on 22 February 2026, according to official data.

By contrast, reports described demand for the Citizen Bond as “limited”, compared with the bank certificates offered by the National Bank of Egypt and Banque Misr in January 2024, which raised about EGP 1.5 trillion

Kouchouk had stated that Egypt is seeking to diversify its financing instruments, markets and sources and is targeting a downward path for the debt of budget-sector agencies, noting that the Egyptian government is seeking to expand swapping part of its debt for investments in all fields through innovative financing models.

Hany Abu El-Fotouh describes the Citizen Bond instrument by saying that “on paper, the idea looks clever”, explaining that access to the bonds through post offices opens the door to segments that do not deal easily with traditional debt instruments or with complex banking procedures, with denominations for the medium and small saver, not the professional investor alone.

Government debt instruments are defined as financial contracts issued by the state, represented by the Ministry of Finance and the Central Bank, to borrow from individuals and institutions in order to finance economic development projects and cover the general budget deficit or control inflation.

Abu El-Fotouh believes that proceeds of about EGP .75 billion in the first issue, followed by about EGP 2 billion in the next issue, look good for a new debt instrument aimed at individuals, but are not enough to declare a broad popular success; demand exists, according to Abu El-Fotouh, but it has not turned into a large wave of popular saving.

However, economist Salma Hussein believes that the Citizen Bond’s proceeds of about EGP 7.7 billion after the two previous offerings remain “a drop in the ocean”, in her words, compared with the size of the government’s financing needs, considering that the figures do not reflect strong demand for the investment instrument.

Salma tells Zawia3 that the bonds primarily target holders of small savings, but in return offer a relatively low yield compared with the yields available on other domestic debt instruments such as treasury bills, explaining that an investor in the Citizen Bond may give up the bond’s amount for a long period while its return remains below the inflation rate, which means the erosion of the money’s purchasing power over time.

Some newspapers had reported weak demand for buying Citizen Bonds from post offices, while experts attributed this to the scarcity of information about the benefits and conditions related to them and the rules set out for customers.

The economist points out that the minimum subscription of EGP 10,000 per certificate represents a barrier for a wide segment of small savers, who do not possess such sums, which may be “huge” for them.

An idea wrong from the outset

Economist Dr Hassan El-Sady describes the idea of the “Citizen Bond” as wrong from the outset, because it was built on the assumption that Egyptian citizens have financial surpluses and are looking for instruments in which to invest or save them, while the economic reality indicates that a wide sector of citizens is suffering from mounting living pressures.

El-Sady tells Zawia3 that offering a bond in denominations of EGP 10,000 was based on the government’s assumption that people on low and middle incomes have savings, whereas the core problem, in his assessment, is “weak incomes”, noting that a large segment of citizens has no financial surplus to save but rather suffers from a gap between income and spending, and pointing out that consumer loans have become one of the most widespread forms of indebtedness among households to cover basic needs.

Data from the Central Bank of Egypt showed that retail lending rose to reach EGP 1.53 trillion as of April 2026, particularly as the persistence of inflation at high levels is pushing customers to resort to borrowing to meet their consumption needs.

According to reports by the Ministry of Planning and Economic Development, the investment rate in Egypt stood at about 12.9% of gross domestic product in the 2024-2025 fiscal year, while domestic savings did not exceed 1.2%, which led to the widening of the domestic resource gap to 11.7% of gross domestic product.

Banking expert Sahar El-Damaty, on the other hand, describes the “Citizen Bond” proceeds of about EGP 7.7 billion since its launch as “a good result”, explaining that the instrument was offered only about 5 months ago, and adding that the bond’s return over a year and a half gives citizens an opportunity to invest through a new savings instrument at EGP 10,000, which she describes as “not a large figure for the target group”.

She tells Zawia3 that the greatest demand for the bond came from residents of villages and district towns, because of the relatively short investment period and the low minimum subscription, as well as the level of return, which she described as “good”.

As for comparing the “Citizen Bond” with the 2014 Suez Canal investment certificates, the banking expert describes the comparison as “inaccurate”, explaining that the Suez Canal project carried a character she described as “national”, and noting that the Suez Canal certificates were available in various amounts without major restrictions on participation, which allowed even holders of limited savings to subscribe to them.

About 12 years ago, citizens flocked to Egypt Post to invest in the New Suez Canal certificates through its widespread offices, and the post offices alone managed to collect about EGP 750 million of the proceeds of EGP 60 billion raised for the entire project.

Likewise, economics professor Dr Karim El-Omda describes the value of a single bond, denominated at EGP 10,000, as “suitable” for small savers among workers, farmers, housewives and owners of small enterprises and shops, noting that the annual return is 17.75% for 18 months, with the return paid monthly and exempt from taxes, advantages which, according to El-Omda, match the needs of a wide segment of citizens looking for a regular periodic income.

El-Omda, however, rules out treating the proceeds of the “Citizen Bond” as a direct indicator of the economic or social conditions of the middle class, explaining that the bond, in essence, is not a new financial product but a simplified and accessible version of traditional government bonds.

He continues that the state designed the instrument to suit citizens’ needs by providing a monthly return and tax exemptions and making subscription available through the widespread post offices, to facilitate access to it in villages, district towns and neighbourhoods without the need to deal with complex banking procedures.

The Citizen Bond: certain failure or pale success?

Dr Karim El-Omda says that talk of the bonds’ success or failure at this stage may be premature, expecting demand for them to increase gradually as awareness of their nature and advantages grows, especially since they largely resemble the bank savings certificates familiar to citizens.

El-Omda adds that one of the important advantages of the new instrument is that its offering aims to make it easier for ordinary citizens to access government investment instruments, while traditional bonds attract banks, domestic and international investment funds and financial institutions.

As for the size of the proceeds, El-Omda says that EGP 7.7 billion is not weak but a reasonable figure in light of the instrument’s novelty and the lack of sufficient knowledge of it among citizens, as he put it, explaining that confidence in economic policies plays an important role in attracting savings, alongside the importance of good promotion of and awareness about the investment instrument, how it works and its advantages.

Hany Abu El-Fotouh, meanwhile, says that the advantage of the Citizen Bond is that it tried to address an unbanked public in simple language through the post office, describing this as “a marketing strength”, and pointing to another advantage, in his assessment, namely the possibility of redemption after 4 months, which eases the fear of full commitment until maturity, but he asks: does the citizen want a new savings instrument, or a return that protects him from the erosion of purchasing power?

Abu El-Fotouh believes that the Citizen Bond has not failed, but it has not yet proven that it has become a mass savings instrument, and he points out that its real success will not be measured by the initial proceeds alone but by its ability to win over savers who want security, liquidity and a return that does not quickly melt away in the cost of living.

Salma Hussein, for her part, fears that citizens will incur losses given the relatively low return on the Citizen Bond, noting that issuing long-term securities is positive for the government but suits large investors and major companies, whereas, according to Salma, reliance on short-term debt instruments such as treasury bills ought to be reduced.

The economist adds that the structure of government debt is “inverted”, as she describes it, since the government relies to a greater extent on short-term treasury bills, which imposes very high obligations on it as a result of interest rates approaching 30%, while long-term debt represents a smaller share of total borrowing, noting that a return of .7517% on this Citizen Bond, a difference of about 13%, pushes citizens to invest in short-term treasury bills.

Limited demand

On the social dimension, Salma Hussein explains that poverty rates among Egyptians, which range between 35% and 37%, do not necessarily mean that offering savings instruments is unjustified, noting that the old investment certificates were attractive to small savers through simple denominations starting at EGP 10, EGP 20 and EGP 100 and their multiples.

Since 2020, the Central Agency for Public Mobilisation and Statistics has not issued the poverty indicator it customarily issued every two years as part of the Income and Expenditure Survey; however, informed sources said that the poverty rate in mid-2023 exceeded 35.5% of Egyptians, while the World Bank indicated in a report in 2025 that the poverty line is the threshold below $6.85 per day, a proportion of about 66% of Egyptians.

Salma adds that starting subscription to a savings instrument at EGP 10,000 means in practice that it targets the middle class more than small savers, noting that this excludes a large sector of low-income citizens.

She continues that some members of the middle class may find these bonds a suitable means of investing their savings, even if that means collecting the amount through a “savings circle” or other means of saving, but the level of return, which she described as “meagre”, remains a source of concern.

On the relationship between the savings instruments the government offers and wage levels, the economist states that the government is not primarily targeting the lowest-income segments with its offering, noting that the target group appears closer to senior employees or households with a financial surplus, and pointing out that low savings rates among lower-income segments are “natural”.

For his part, Dr Hassan El-Sady states that the high poverty rates in Egypt and the broad base of beneficiaries of social support programmes, such as the “Takaful and Karama” programme, which covers nearly 5 million families, reflect citizens’ limited ability to direct part of their incomes to savings or investment instruments.

According to the Ministry of Social Solidarity, the Takaful and Karama programme provides cash support to 4.7 million of the families most in need, comprising approximately 17 million citizens, with a budget of EGP 54 billion annually.

El-Sady considers weak demand for the government’s savings instruments “an indicator of the limited liquidity available to individuals”, stating that the Citizen Bond’s proceeds, for example, amount to about EGP 7.7 billion and were collected from two offerings, yet do not reflect real success, and adding that the evaluation of the experience should not be limited to the value of the proceeds achieved but should take into account the administrative, marketing and organisational costs associated with the issuance process, asking: “The Citizen Bond raised EGP 7.7 billion… so what is the administrative cost of raising this amount, such as staff, post office premises, paperwork and everything related to issuing the bonds?”

El-Sady believes that the limited demand from ordinary citizens (not institutions) for the government’s financial instruments sends negative signals to foreign investors about the volume of liquidity available in the local market and citizens’ ability to save, which may affect some investors’ assessment of investment opportunities in the Egyptian market, noting that weak income levels are reflected in other sectors such as education, health and human capital development, factors that affect the economy’s attractiveness to new investment.

For his part, Dr Karim El-Omda points out that the relatively limited demand for the government financial instruments offered to citizens is not linked to citizens’ weak capacity to save, but is due to a greater extent to the fact that most savers still prefer the usual traditional instruments, such as the savings certificates of the National Bank of Egypt and Banque Misr, even though the two are similar in essence, expecting that accumulated experience and greater awareness will raise demand for them in the future.

Sahar El-Damaty, however, rules out that declining purchasing power or rising poverty rates are the main reason behind the weak proceeds of the savings instruments the government offers, noting that the “Citizen Bond” raised about EGP 7.7 billion within a relatively short period, which points to real demand for the instrument, and that the most influential factor is weak media reach, describing the bond’s return of 17.75% for a year and a half as “acceptable”.

Sahar explains that the most important factor behind the “Citizen Bond” in particular not achieving larger proceeds is that its advertising did not achieve sufficient reach in the governorates, district towns and villages, even though those areas are well connected to the post office network, noting that many citizens did not know about the bond’s offering at all, even in some governorates.

Citizens do not trust the government: a familiar argument and well-known responses

Hany Abu El-Fotouh states that the buyers of the Citizen Bond are not large investors but savers looking for a clear monthly income, and explains that the problem lies in the lack of liquidity and in the instrument’s attractiveness, since headline inflation of 14.6% at the end of May last keeps the question of purchasing power present, and the deposit rate of 19% makes the comparison difficult, because the Citizen Bond comes with a return of 17.75%, about 1.25% below the deposit rate; consequently, the saver asks what will remain of the return for him after the pressure of prices.

Abu El-Fotouh explains that a household that used to save part of its income may find itself forced to keep more cash for food, transport, medicine and schools, while money that used to go into medium-term savings may turn into an emergency reserve, noting that the shrinking room for saving within the middle class does not allow it the luxury of tying up money.

He adds that the paradox of citizens’ trust in the government is present, but in a more complex way, since turning the individual into a direct creditor of the government requires a clear message about the purpose of the government’s financial instruments and an understanding of their position among certificates, deposits, treasury bills and other alternatives, noting that if citizens sense that returns will rise later they may wait, whereas if they sense that inflation will persist they may prefer to hold on to cash or look for other means.

In the same context, Salma Hussein states that the government may need to promote more widely the financial instruments it offers to citizens, but at the same time she believes that there is “a mismatch between the goal and the means”, explaining that the success of any financial instrument requires clarity about the core purpose of offering it.

She adds that if the government’s goal is to raise citizens’ savings rates, it would be better to offer smaller denominations of the financial instruments, such as EGP 1,000 and its multiples, allowing wider segments of citizens to participate and reducing the apprehension of investing one’s entire savings in a single security, noting that an investor who has EGP 10,000 may prefer to buy 10 small units rather than one large unit, and considering that this design enhances the attractiveness of savings instruments.

But she states that the real purpose of offering government financial instruments to citizens is for the government to obtain low-cost long-term financing, noting that this should have meant targeting large savers directly while offering a higher return suited to the nature of long-term investment. Salma also points out that investment logic usually dictates that the return rises the longer the investment period, whereas the opposite happens with the government and its relationship with citizens.

Dr Hassan El-Sady, meanwhile, says that the government could have turned to other alternatives to increase public revenue instead of offering financial instruments to citizens, among them imposing higher taxes on large fortunes, of up to 40%, noting that applying a tax on the wealth of Egyptian businessmen who refuse to repay bank loans could yield proceeds of billions of pounds, without the need to shortchange citizens of their right to invest their little money, if they have any, as he put it.

El-Sady notes that economic policies must focus on improving citizens’ income levels and purchasing power before offering savings instruments aimed at attracting their savings, because the success of any financial instrument depends first on the existence of real financial surpluses among the target groups.

The “Citizen Bond” does not appear to be merely a test of the success or failure of a new savings instrument, but a mirror reflecting a more complex economic reality: the proceeds the bonds collected over months point to a segment that is still able to save and is looking for safe instruments in which to invest its money, but at the same time they reveal the limits of the saving capacity of a wide sector of Egyptians whose incomes are mostly devoured by living pressures and inflation. So does the Egyptian citizen today have enough to become a saver in the first place?

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