Egypt eyes $21bn aid amid talks with World Bank and African Development Bank

Deputy finance minister confident discussions will take place this month as country bids to boost programme designed to restore investor confidence.
Ahmed Kouchouk, Egypt's deputy finance minister for monetary policy, says the country is seeking finance from the AfDB. Amr Abdallah Dalsh / Reuters
Ahmed Kouchouk, Egypt's deputy finance minister for monetary policy, says the country is seeking finance from the AfDB. Amr Abdallah Dalsh / Reuters

Egypt expects to hold talks with the World Bank and African Development Bank this month on the second instalment of an assistance package as the country seeks to mobilise international support to revive its struggling economy.

A joint mission from the two lenders will visit Egypt by the end of this month, the deputy finance minister Ahmed Kouchouk said on Tuesday in Dubai. “The ministry of international cooperation is leading this file,” he said, without providing details.

Egypt is seeking to attract US$21 billion over three years to finance a programme that aims to restore investor confidence in an economy battered by instability and a crippling dollar shortage. Authorities are edging closer to conclude a $12bn loan accord with the IMF and have already secured a total of $1.5bn from the World Bank and AfDB. The international cooperation ministry said this month it aims to receive a similar amount by the end of this year.

Mr Kouchouk said the government expects the IMF’s board to review its loan request “a few weeks from now”. “The IMF for us is a buy-in in our home-grown programme,” he said.

As part of the plan to shore up public finances, authorities have approved a value-added-tax law and lowered electricity subsidies. Economists expect the measures, as well as a widely anticipated currency devaluation, to drive consumer prices higher. Inflation is already at the highest level since at least 2009 after policy makers weakened the pound by more than 10 per cent in March.

The government is planning to double spending on cash transfer programmes to help to shield the poor, Mr Kouchouk said. “We want to increase the number of beneficiaries from half a million families to 1.5 million families by the end of June, and this is realistic,” he said. Egypt has a population of about 90 million.

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Published: September 20, 2016 04:00 AM

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