Cabinet: Egypt's New IMF Agreement Aims to Reduce Government Debt
The new International Monetary Fund (IMF) $3 billion financial support package for Egypt aims to reduce government debt to less than 80% of gross domestic product (GDP) in the medium term, a cabinet report released on Saturday said.
The fund did not require the Egyptian government to cut spending on subsidies, the report said, adding that the new program aims to strengthen the social protection network for citizens.
The IMF executive board approved on Friday a 46-month $3 billion financial support package for Egypt, saying it will catalyze additional funding of about $14 billion.
In a background document on Egypt, the IMF said the new program would fund some of the country's foreign currency financing gap, and that Cairo had secured $5 billion in new financing for the fiscal year ending in June 2023.
Of that, $2 billion would come from the sale of equity in private sector companies and $3 billion from multilateral support, separate to the rollover of deposits by Gulf states in Egypt's central bank.
The IMF said its program aimed to support plans by authorities to reduce the state's footprint in the economy, increase transparency around SOEs, and create a level playing field for all economic actors.
It said Egyptian authorities had committed to the publication by the finance ministry of biannual accounts of SOEs along with information on subsidies to SOEs.
Egyptian authorities had also committed to the publication of data including audit reports on fiscal accounts, procurement contracts of more than 20 million Egyptian pounds ($811,360), and an annual report on tax breaks, exemptions and incentives, it added.