File Photo: Finance Minister Amr El-Garhy at a news conference in Cairo, Egypt August 11, 2016 (Photo: Reuters)
A delegation from the International Monetary Fund (IMF) arrive in Cairo Sunday to follow up on the progress in the country's economic reform programme ahead of delivering the $1.25 billion second tranche of an IMF loan, according to a finance ministry statement Saturday.
The visit is due to last until 11 May and includes meetings with officials from the Central Bank of Egypt (CBE) and finance ministry to discuss plans for the second phase of the country's reform programme, including the 2017-2018 state budget, and structural reforms adopted by the government.
Ahmed Kajok, deputy finance minister, said that the national economic reform programme agreed with the IMF targets an economic growth rate of 5.5 percent by the year 2018/2019, aimed at securing increased employment through reforms to increase competitiveness, attract investment, increase exports, and reduce the budget deficit from 3.5 percent of the Growth Domestic Product (GDP) during 2015/2016, to a surplus starting 2017/2018. The programme also aims to reduce internal debt to 90 percent of GDP by 2018/2019.
These steps, together with monetary policies, aim to achieve stability at the macroeconomic level and reduce inflation.
Minister of Finance Amr El-Garhy said Egypt will acquaint the delegation with the latest developments on employment, inflation, and growth rates, the balance of payments and external accounts, and on efforts on financial regulation and reducing the deficit and public debt, as well as reviewing Egypt's vision for future reform.
El-Garhy stressed that IMF and international support to Egypt's reform programme sends significant message to local and foreign investors, backing government plans to focus on removing all obstacles to enable the development of national industry, the finance ministry statement read.
According to Kojak, as the state reaps the benefits of reform, it can increase public spending on education, health, infrastructure investment, such as social housing projects, address underdeveloped areas, poor villages, public transportation, water and sanitation, as well as social protection programmes, such as monetary subsidy programmes to those in need.
Kajok confirmed that the IMF loan will finance the budget deficit as well as enhance foreign currency reserves at the Central Bank.
IMF managing director Christine Lagarde reiterated the organisation’s support for Egypt's economic reform programme following a Washington meeting with Egyptian President Abdel-Fattah El-Sisi early April.
Lagarde described Egypt's economic reforms as a strong programme "to help the economy return to its full potential, achieve more growth and create more jobs."
According to CBE figures 1 April, Egypt's foreign debt jumped 40.8 percent year-on-year to $67.32 billion in December.
Egypt is negotiating billions of dollars in aid from various lenders to help revive the economy and ease a dollar shortage that has crippled imports and driven away foreign investors.
Egypt has received the first tranche of a three-year $12 billion loan deal struck with the IMF, and is expecting to receive the second tranche soon.
The second tranche of a $3 billion loan from the World Bank was disbursed to Egypt last month.