IMF delegation in Cairo ahead of second loan installment

IMF delegation in Cairo ahead of second loan installment
A delegation from the International Monetary Fund has arrived in Cairo to review Egypt's economic situation before doling out another huge loan to the country.
2 min read
30 April, 2017
The Egyptian Pound was trading at around 18 pounds to the dollar on Sunday [NurPhoto]

A delegation from the International Monetary Fund (IMF) arrived in Cairo on Sunday to review the country's economic reforms ahead of delivering the second tranche of a $12 billion loan, the finance ministry said.

During their stay until 11 May, the IMF delegates will meet with officials from the ministry and the Central Bank of Egypt (CBE) to discuss plans for the second phase of the country's reform programme, including the 2017-2018 state budget, and structural reforms adopted by the government.

Egypt has said it expects to receive the second instalment, worth $1.25 billion, in May or June, once the IMF review has been completed.

In January, IMF's mission chief in Egypt Chris Jarvis said Egypt had made a "good start" on reforms required by the loan deal, putting it on track to receive its next aid tranche.

Austerity measures and a struggling economy have led to criticism of President Abdel Fattah al-Sisi who promised to stabilise Egypt following the 2013 military coup.

This month, he asked Egyptians to "bear the pain" as further government cuts and high unemployment continue to hurt the poorest in the country.

The IMF released a first instalment of $2.75 billion in November, shortly after Egypt signed the three-year deal, under which the country is required to cut energy subsidies, raise taxes and seek more international financing.

As part of reform efforts, Egypt has introduced a Value Added Tax (VAT) and secured $4 billion in Eurobonds from international markets in an over-subscribed issuance.

It is also part way through a programme to reform power and fuel subsidies and is preparing to privatise several state owned banks and energy companies.

Earlier this month, IMF Managing Director Christine Lagarde described Egypt's economic reforms as a strong programme "to help the economy return to its full potential, achieve more growth and create more jobs".

According to CBE figures in April, Egypt's foreign debt jumped 40.8 percent year-on-year to $67.32 billion in December.

The Egyptian currency was trading at around 18 pounds to the dollar on Sunday.

Egypt is reeling after six years of political and economic turmoil involving the ousters of two presidents.

Economic growth has slowed, investment has fallen sharply and currency reserves have plunged.

Cairo governments had avoided implementing the economic reforms for years fearing unrest, but President Abdel Fattah al-Sisi said Egypt no longer has the luxury of postponing them.