Egypt to bridge financing gap by selling state-owned assets: IMF

Doaa A.Moneim , Sunday 15 Jan 2023

Egypt aims to bridge its financing gap through FY2025/26 mainly by selling state-owned assets, including to member states of the Gulf Cooperation Council, according to a staff report the International Monetary Fund (IMF) released last week on Egypt’s new IMF-backed $3 billion loan deal.

An employee counts U.S. dollars in a foreign exchange office in central Cairo, Egypt,

The deal programme, which was approved in December, is scheduled to conclude in FY2025/26.

According to the report, Egypt plans to secure $2.6 billion from the World Bank through FY2025/26, $400 million from the Asian Infrastructure Investment Bank, $300 million from the African Development Bank, $600 million from the Arab Monetary Fund through FY2023/24, $1 billion from the China Development Bank, and $8.6 billion from the sale of state-owned assets.

The IMF estimates Egypt will experience a $17 billion financing gap over the next four years.

Through the loan programme, Egypt aims to address the imbalances in its macroeconomy caused by the Russia-Ukraine conflict.

The government has pledged to the IMF to slow down national projects in order to limit pressure on the foreign exchange market and inflation.

Egypt has also pledged to increase the role of the private sector in growth in parallel with reducing the size of the state’s footprint in the economy, levelling the playing field between public and private institutions, and strengthening governance and the business climate to support export-driven and private sector-led growth.

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