Prime Minister Mostafa Madbouly speaking during a press conference held on Thursday 25 August 2022 in the government's headquarters in New Alamein City (photo courtesy of the official Facebook page of the Egyptian Cabinet)
Madbouly said the IMF has welcomed the government's recently announced social protection package, saying, "no economic reform programme can be successfully implemented without being paralleled with a social protection programme."
"The fund, therefore, has no objection or reservation, but rather welcomes all social protection programmes implemented by the Egyptian state at the time being," Madbouly said at a press conference held in the New Alamein City, where he announced the launch of the new social net safety package.
The new package, to be put into effect in September, was devised following a directive by President Abdel-Fattah El-Sisi to help citizens cope with the ramifications of the ongoing Russia-Ukraine war.
Madbouly said "There has been a lot of discussions around the current negotiations. However, some people are talking without knowing the details of the negotiations. Some may ask: Then why don't you tell us tell us these details? It is because these details have to remain by their very nature private and confidential until an agreement is reached with the fund."
In March, Egypt submitted a request to the IMF for a new loan to back its plans for the economic reforms and to meet the country’s financial needs in response to the global economic challenges amid the ongoing Russia-Ukraine war.
The first wave of economic reforms implemented by the Egyptian government from November 2016 to July 2019 was backed by a $12 billion IMF loan to Egypt under the under the Extended Fund Facility (EFF) facility.
The step was followed by two more separate loans totalling $8 billion in 2020 under the IMF’s Rapid Finance Facility and Stand-By Arrangement to tackle the harsh impacts of the pandemic.
The prime minister said during Thursday’s press conference that the current negotiations with the IMF had started before the Russia-Ukraine war.
"Once the previous programme was concluded on 30 June 2021, we began negotiating with the fund [on the new one]," he explained.
"The Egyptian government has had a vision of maintaining extended relations between Egypt and the IMF, notably amid the prevalent crises such as the coronavirus pandemic."
The talks with the IMF – until the end of 2021– only focused on technical support to help Egypt complete its economic and structural reform programmes in various sectors, he clarified.
"After the Russia-Ukraine crisis put pressures on the hard currency, we thought of adding a financial aid component that could be made available to the Egyptian state," he further said.
Madbouly affirmed that the terms of the current negotiations are the same as the programme Egypt was negotiating with the IMF before the Russia-Ukraine war.
Talks with the IMF are mainly focusing on maintaining the stability of Egyptian economy in order to avoid the severe shocks of the ongoing crises, Madbouly assured.
He expressed his hope that the state will reach an agreement with the international lender as soon as possible on all components of the new aid programme, noting that the details of the programme will be announced as soon as a deal is reached.
Earlier in the week, Madbouly said the country is in the final stage of talks with the IMF to conclude the new loan deal.
In late July, Minister of Finance Mohamed Maait said that talks with the IMF had achieved "great progress," and that the government was still working to resolve points of dispute with the international lender.
Maait’s remarks came a day after the IMF had said that Egypt would be required to make “decisive progress on deeper fiscal and structural reforms to boost the country’s economic competitiveness, improve governance and strengthen its resilience against shocks.”
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