A man carries a bag with bottles, metals and other recycling elements for sale on a ring road in the district of Maadi, Cairo on Monday. The readiness of Egypt’s social protection programmes is among the issues set to be discussed during IMF chief Kristalina Georgieva’s planned visit to Cairo in early November
The readiness of Egypt’s social protection programmes is among the issues set to be discussed during IMF chief Kristalina Georgieva’s planned visit to Cairo in early November. The North African nation has signalled it’s seeking to review the targets and timelines of its $8bn IMF loan deal amid regional upheaval.
The new data will likely show the effects of two years of currency devaluations and price hikes on household spending, allowing the IMF and the government “to make sure that the social programmes that Egypt has can be made more effective,” Jihad Azour, the IMF director for the Middle East, North Africa and Central Asia, said in an interview in Washington.
Egypt, home to more than 106mn people, in March agreed on an expanded IMF loan deal as one of the cornerstones of a vast global bailout for an economy that had been mired since early 2022 in a gruelling foreign exchange crisis. Authorities have since pushed through sharp cuts in subsidies for fuel, bread and electricity, piling yet more pressure on beleaguered consumers.
President Abdel Fattah al-Sisi said on October 20 the IMF pact was being enacted under “extremely difficult” regional and economic conditions — a reference to Israel’s year-long conflicts with Hamas and Hezbollah — and a review would be needed if the financial pressures became unbearable for ordinary Egyptians.
The IMF said it’s been open to adjustments to Egypt’s programme, while signalling the loan amount likely won’t change. The Washington-based lender is stressing the importance of sustaining currency reform, after authorities let the Egyptian pound plunge almost 40% in March and said its value would reflect supply and demand going forward.
“We encourage authorities to maintain the flexibility of the currency,” Azour said. The IMF team “will definitely assess the situation” during Egypt’s latest programme review next month.
“We also look forward to seeing greater investment coming,” he said. Still, he added that “the high level of uncertainty in the region is not a conducive factor” to attracting foreign direct investment.
Egypt has pledged to sell more than two dozen assets in an IMF-backed drive that would reduce the state’s substantial role in the economy while bringing in crucial foreign money. The country hasn’t announced a major sale since the last devaluation.
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