IMF says Egypt needs progress on fiscal and structural reform

The International Monetary Fund said on Tuesday that Egypt needed to make “decisive progress” on fiscal and structural reform as Cairo seeks a new round of support from the fund.

In an evaluation of a $5.2 billion stand-by arrangement agreed with Egypt in 2020, the IMF’s executive board noted “Egypt’s remaining vulnerability from a high public debt burden and large gross financing requirements”.

“Decisive progress on deeper fiscal and structural reforms is needed to boost the economy’s competitiveness, improve governance, and strengthen its resilience against shocks,” the board said in a statement.

Reforms should also foster private sector development and reduce the role of the state, the statement said.

The board’s evaluation “should inform the ongoing discussions on the Fund’s future engagement with Egypt”, it added.

Earlier this month, the IMF said it was continuing discussions with Egypt aimed at agreeing an extended fund facility that would support economic policies and reforms.

The IMF announced that Egypt had made a request for a new programme in March as the country came under new financial pressure due to economic fallout from the war in Ukraine.

Meanwhile, Egypt will add one million families to a social safety net programme that provides cash transfers, bringing the total number of beneficiaries to more than 20 million, the presidency said in a statement on Tuesday.

The “Solidarity and Dignity” programme began in 2015 with World Bank funding. Payments to families start at 350 Egyptian pounds ($18.50) per month and are conditioned on children’s school attendance.

Families whose children are married before the age of 18 are excluded from the programme, according to Egypt’s Social Solidarity Ministry.

The presidency said nine million needy families would also receive separate, exceptional aid over six months, at a cost of about 1 billion Egyptian pounds ($53 million) per month.

Egypt, which has a rapidly growing population of about 103 million, has suffered successive economic shocks from the coronavirus pandemic and the war in Ukraine.