The International Monetary Fund (IMF) has raised its estimate for the financial gap in Egypt from $16 billion to $17 billion, IMF Mission Chief for Egypt Ivanna Vladkova Hollar said at a virtual press conference on Tuesday.
However, the $3 billion loan approved by the IMF executive board and the reforms that will catalyse additional funding will help Egypt close a $17 billion financing gap over the next four years, the Washington-based lender explained in its staff report released in conjunction with the press conference.
“Our structural reform agenda will focus on enhancing the role of the private sector in growth while reducing the size of the state’s footprint in the economy, leveling the playing field between public and private institutions, and strengthening governance and the business climate to support export-driven and private sector-led growth. With these policies, the support of the IMF, and the mobilisation of funds from international partners, we will close the financing gap for the next four years (the programme period) which amounts to about $17 billion.” the report read.
“In support of this programme, we will mobilise funds from our foreign partners to close the remaining financing gap. The current projections suggest that with the policies outlined in this memorandum the remaining financing gap for 2022/23 is $5.04 billion after accounting for $0.7 billion from the IMF.
“We expect to close this gap as follows: $1.1 billion from the World Bank; $0.4 billion from the Asian Infrastructure Investment Bank; $0.3 billion from the African
Development Bank; $0.3 billion from the Arab Monetary Fund; $1.0 billion from the China Development Bank; and $2.0 billion in committed purchases of public sector assets, including from partners in the GCC.”
“To ensure that the financing gap does not increase further, we have also secured assurances from GCC partners which ensure that the $28 billion in official deposits from GCC members at the CBE (at end-September 2022) do not mature until after the completion of the four-year Extended Fund Facility in September 2026 and will not be used for the purchase of equities or debt.”
Hollar added that Egypt’s inflation will remain elevated in 2023 but is expected to lower to 7 percent in the financial year 2024/2025.
Egypt is required to submit an annual report on the progress of the State Ownership Policy, she stated.
