IMF welcomes Egypt's recent progress in IPO, tackling US dollar shortage

Doaa A.Moneim , Thursday 13 Jul 2023

The International Monetary Fund (IMF) has welcomed recently steps by the Egyptian government to push forward the Initial Public Offering (IPO) Programme, boosting the private sector and tackling its dollar shortage.



The announcement was made in answer to Ahram Online's question on the IMF's perception of such measures in light of the stalled first review of the current $3 billion deal with Egypt.

This took place during a hybrid press briefing the IMF held on Thursday.

“We welcome the Egyptian authorities' announcement that they have signed contracts to sell equity stakes in state-owned entities worth $1.9 billion. Divesting is a critical component of the Extended Find Facility (EFF)-supported program, supporting the
gradual withdrawal of the state from economic activity and providing resources for external financing and debt reduction”, said Head of the IMF’s Communication Department Julie Kozack.

On Tuesday, the Egyptian government announced it had completed 25 percent of the fourth phase of its IPO Programme, including offering 32 state-owned companies as investment opportunities, whether under the IPO or assigned to strategic investors.

The government also unveiled its plan to tackle the lack of US dollar liquidity in the local market by attracting $191 billion annually within three years, mainly from Suez Canal revenues, remittances, and commodity exports, among other resources.

Making progress in the IPO Programme is a crucial element under the current IMF-backed loan deal. The first review of the Programme has missed two scheduled appointments.

Kozack also noted that the announcement constitutes essential progress in implementing a vital element of the comprehensive policy package to restore macroeconomic stability.

Earlier this week, Prime Minister Mostafa Madbouly announced that Egypt plans to bring in $191 billion in annual US dollar revenues by 2026, up from the current figure of $70 billion.

Egypt expects to collect $83 billion in foreign currencies during FY 2023/24 through remittances, non-oil merchandise exports, foreign direct investment (FDI), and revenue from the Suez Canal.

The country is ramping up efforts to fulfil its commitments to the IMF under the Extended Fund Facility (EFF) loan programme, announced on 27 October of this year. In December, it received the first tranche of a new IMF loan of $347 million.

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