IMF/WBG annual meetings kick off in Marrakech with Egyptian participation

Doaa A.Moneim , Monday 9 Oct 2023

The annual meetings (autumn meetings) of the International Monetary Fund (IMF) and the World Bank Group (WBG) kicked off on Tuesday in Marrakech and will continue through 15 October.

File Photo: IMF Building


The meetings come amid severe challenges for the global economy, particularly for developing countries and emerging markets.

The meetings are being held in an African country for the first time in 50 years, the last time being in Kenya in 1973.

A high-level delegation from Egypt is participating in the meetings that include Governor of the Central Bank of Egypt (CBE) and the Governor of Egypt at the IMF Hassan Abdallah, the Deputy Governor of Egypt at the IMF and the Minister of Finance Mohamed Maait, and the Governor of Egypt at the WBG and the Minister of International Cooperation Rania Al-Mashat.

The Egyptian presence in the meetings comes as Egypt is engaged in an Extended Fund Facility (EFF) programme with the IMF to secure a $3 billion loan through FY2025/2026.

The Egyptian delegation is expected to consult with IMF officials during the event to push the deal forward, which has not witnessed any progress since the IMF approved it in December 2022.

Egypt has so far only secured only the first tranche of the loan valued at $347 million. Neither of the two scheduled reviews, one in March and the other in September, have been completed.

“We continue our close engagement with the Egyptian authorities on restoring macroeconomic stability and the implementation of their reform agenda. We will communicate programme-related updates in due course,” the Spokesperson and the Director of Communications at the IMF Julie Kozack told Ahram Online last week without giving more details.

Under the deal, Egypt has committed to raising the share of the private sector in the economy, adopting flexible interest and exchange rates, bringing down soaring inflation to seven percent by the end of the programme, and replenishing the country’s international reserves.

In July, the IMF welcomed Egypt’s announcement of a plan to tackle the dollar shortage and increase the private sector’s role in the economy. This plan aims to secure $191 billion from tourism, the Suez Canal, outsourcing services in the IT sector and exports, and remittances.

However, Managing Director of the IMF Kristalina Georgieva stated last week that Egypt will bleed precious reserves unless it devalues its currency again while hailing the actions Egypt has taken so far to boost its suffering economy.

Since March 2022, following the outbreak of the Russia-Ukraine war, Egypt has devaluated its local currency against the US dollar three times to record levels. The EGP has lost over 75 percent of its value against the greenback since then.

Currently, the US dollar is traded for around EGP 31, while it is traded for around EGP 45 on the parallel market.

“Tackling the much-delayed progress in terms of the IMF deal, the Egyptian government is currently working on a plan to reprice the value of the state-owned assets it offers for investors under its initial public offering programme (IPO). The government will lower the prices of the assets and the shares it intends to float in the stock market in order to lure the gulf investor to tap these opportunities; especially from UAE and Qatar,” a source familiar with the ongoing IMF negotiations told Ahram Online.

The source also noted that the Egyptian authorities are considering depreciating the local currency at least two more times through mid-2024 in order to fulfil its obligations to the IMF, attract more foreign direct investment, and to contain the rising rates of the US dollar in the parallel market.

However, Egypt will not take concrete actions until the end of the presidential elections in December, the source stressed.

The source also mentioned that Egypt will announce during the coming months new progress on its IPO programme. In addition, Egypt could announce new increases in electricity and fuel prices during the first months of 2024 or probably before that, according to the source.

The source expected the first and second reviews of the loan deal to be completed either by the end of 2023 or by the beginning of 2024, which depends on the pace of Egypt’s progress selling state-owned assets and devaluating the local currency.

During the meetings, Egypt is also expected to hold discussions with the WBG’s officials to push forward the $7 billion financing package the World Bank will provide Egypt with under its Country Partnership Framework (2023-27).

Last week, the World Bank raised its projection for Egypt’s real GDP growth in 2023 to 4.2 percent, up from four percent, while downgrading the country’s growth outlook for 2024 to 3.7 percent from four percent.

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