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Saturday, 19 October 2019

Egypt signs $1 bn loan with World Bank

Ahram Online , Saturday 19 Dec 2015
International Cooperation Minister Sahar Nasr
International Cooperation Minister Sahar Nasr talks during an interview in Cairo, Egypt, December 8, 2015 (Reuters)
Views: 3308
Views: 3308

Egypt and the World bank signed on Saturday a $1 billion loan as part of a $3 billion allocation spanning over 3 years, the International Cooperation Minister Sahar Nasr announced.

The government will receive the first tranche of the loan, amounting to $1 billion before the year's end, according to a cabinet statement.

The loan has a maturity of 35 years and carries an annual interest rate of 1.68 percent with a grace period of five years.

The minister said the loan secures economic growth and provides much-needed foreign currency liquidity to help offset the state's budget deficit.

The World bank also approved expanding Egypt's portfolio with its subsidiary the International Bank for Reconstruction and Development to $6 billion from $5 billion over the five years from 2015 to 2019, Nasr said last Thursday.

The International Finance Corporation, another member of the World Bank Group which seeks to support private sector growth, also plans $2 billion of financing over that period, according to a World Bank press release.

Egypt, which is currently experiencing a foreign liquidity crunch, requires foreign currency for imports of basic foodstuffs and raw materials for industries.

Foreign currency reserves stood at $16.44 billion at the end of November.

‪Egypt embarked on a politically sensitive fiscal reform programme following the election of President Abdel-Fattah El-Sisi in June 2014. The first phase of the programme saw fuel subsidy cuts, raising prices at the pump by up to 78 percent.

Egypt's economy has suffered from political turmoil since the 2011 revolution that toppled autocrat Hosni Mubarak.

Billions of dollars in financial support from Gulf Arab allies have helped keep the economy afloat. 

Correction: The article was corrected to show that the loan package is $3 billion over three years not $8 billion.

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20-12-2015 04:43pm
Why it is so difficlut
No one at the Egyptian Cabinet is able, or willing, to publish any economic plan to show what these loans or aid is going into! Either all these loans are just plunging the holes in the sinking ship, and thus it's a more severe economic disaster than we all think; or even the economically-competent Minister Nasr has no choice but to succumb to the distorted agenda of the PM and President; which one?
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