The government does not need the approval of the Shura Council (the upper house of Egypt’s parliament, currently endowed with legislative powers) to accept a proposed $4.8 billion loan from the IMF, Planning Minister Ashraf El-Arabi said on Wednesday, according to Al-Ahram’s Arabic-language news website.
“El-Arabi’s statements are aimed at reassuring the public, but a loan like this must be approved by the legislative authority,” Hani Genena, head of research at Cairo-based Pharos Investment Bank, told Ahram Online.
Genena added that one of the IMF’s conditions for the loan is that the Egyptian government achieve “political consensus,” which, he said, could only be attained through the Shura Council.
According to Article 120 of Egypt’s new constitution, the government cannot borrow money without the approval of the country’s legislative authority.
El-Arabi attributed the IMF loan delay to ongoing disagreements within the Shura Council regarding implantation of planned sales tax increases, which were proposed in December by President Mohamed Morsi but which have yet to be approved by the Shura Council.
Ahram
