Egypt to receive $2B from IMF after program review in June

CAIRO - 26 February 2018: Cairo will receive a $2 billion fourth tranche of its $12 billion loan from the International Monetary Fund’s (IMF) after concluding the program third review in June, an IMF regional director told Egypt Today.

“The next review is expected to be completed in June, some weeks after the associated mission visits Cairo. The fourth tranche for the amount of $2 billion will be disbursed upon the completion of the review by the IMF Executive Board,” Azour said.

The IMF Executive Board approved in November 2016 a three-year Extended Fund Facility (EFT) loan to Egypt worth $12 billion to support its economic reform program.
In December 2017, Cairo received the third $2 billion tranche of its loan, bringing total disbursements to $6.08 billion.


Head of Business Section for Egypt Today interviews IMF Director of the Middle East Jihad Azour- Egypt Today/Yasmine Samra

When asked about suggestions to Egypt’s government to avert a possible increase in its budget deficit given the recent jump in global oil prices, Azour said : “An objective of the authorities’ reform plan is to eliminate all fuel subsidies except for LPG by fiscal year 2018/19. This will shield the budget from fluctuations in oil prices and protect social spending.”

Egypt’s budget deficit for the 2017/18 fiscal year is expected to reach 9.4 percent of gross domestic product (GDP), up from previous projections of about nine percent, deputy finance minister Mohamed Meait told Reuters in January.

Meait attributed the rise to the increase in global oil prices and high local interest rates.

Speaking on the IMF efforts to help Egypt’s government’s boost its revenues, Azour said that ther Fund has “a long-standing engagement with Egypt for both tax policy and tax administration and on a broad range of issues to increase tax revenues.”

He explained that the fund provided support with the implementation of the VAT in areas such as legislation and design. Azour added that the fund also provided advice on strengthening tax return filing and payment through the implementation of new procedures.

“We are also assisting the government in assessing issues in Egypt’s international tax rules, which aim to strike a balance between attracting foreign direct investment and safeguarding revenue received from international businesses by limiting tax avoidance through international tax planning,” He concluded.

In an interview with Egypt Today earlier this month, Azour praised Egypt’s progress in the reform process affirming that the “first phase of economic reforms was successful and the authorities managed to achieve stability by gradually reducing the level of inflation and regaining confidence.”

This was translated into massive capital inflows and recovery in some key sectors such as export and tourism, he added.