British ambassador to Cairo John Casson and Egypt’s Minister for Investment and International Cooperation Sahar Nasr signed on 8 March a joint declaration of intent paving the road for a UK loan guarantee of $150 million to help Egypt implement its economic programme, the UK embassy announced on Thursday in an official press release.
The joint declaration was agreed upon by UK Foreign Secretary Boris Johnson and Egyptian President Abdel-Fattah El-Sisi during a Cairo visit by Johnson in late February.
"The UK is Egypt’s top economic partner at this vital moment for the economy," Casson said in the Thursday press release. "We are supporting Egypt’s government in reforms to bring back growth… and we are supporting new investments and entrepreneurship that will help Egypt go from aid to competitiveness and growth."
According to the statement, the UK government and the Egyptian ministry will "work together to develop detailed plans to maximise the value of UK support to Egypt."
The new loan guarantee forms part of a wider package that also includes $18 million to fund technical expertise for the Egyptian government's running of the Takaful and Karama programme, which provides cash transfers for 1.7 million low-income households.
The Takaful and Karama programme, established by the government in early 2015, is a national social safety net programme aimed at providing income support for the poor.
Egypt embarked on an economic reform programme in July 2014 aimed at trimming the budget deficit and increasing the country's economic growth rate through introducing new taxes, such as the value-added tax, and cutting energy subsidies.
In November 2016, the Central Bank of Egypt floated the Egyptian currency and raised key interest rates as part of a package of reforms aimed at reviving the country's flagging economy.
The reform programme was endorsed by the International Monetary Fund, which later approved a three-year $12 billion loan, of which the CBE has received $2.75 billion so far.
The UK has said it played a vital role in the IMF decision as a founder and important contributor to the fund, adding that Egypt’s reform programme will “revive Egypt’s growth prospects by restoring stability and confidence in the economy, attracting investment and creating jobs.”