Egypt’s IMF loan review will come before the end of the year
Egypt’s IMF loan review will come before the end of the year. The IMF has delayed two reviews of our 3 billion USD assistance program after we failed to meet several conditions of the loan, including a commitment to implement a fully flexible exchange rate. IMF Managing Director Kristalina Georgieva recently said that the two sides are making progress on the review — and warned that we would continue to “bleed” reserves if we do not float the EGP. This announcement came on the sidelines of the IMF and World Bank annual meetings. (CNBC Arabia)
- Egypt makes progress on privatization, public finance levels: IMF Chief.
Egypt is making a decent progress on several levels, including privatization and public finance. The North African country is facing a number of challenges but its officials are doing a good job. The IMF is also closely monitoring the economic impact of the war in Gaza as a new obstacle affecting the global economy, but it is too early to give a clear assessment on the matter.
- Moreover, the Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva added that the country still has to do some work regarding the issue of the best ways of the exchange rate movement.
On October 4th, it was reported that the IMF would conduct its annual assessment of Egypt’s economy after concluding the country’s delayed review of its loan program. The IMF approved the 46-month 3 billion USD loan to Egypt under the Extended Fund Facility (EFF) in December 2022. (Al-Arabiya)
- On the other hand, according to Bloomberg, the EGP is expected to be pegged against a basket of currencies.
The authorities will likely reach an agreement with the IMF in Q1-2024 on a new currency regime. The EGP would be pegged to a basket of hard currencies including the USD, EUR, JPY, and GBP, as well as gold. The USD will have the largest impact on the index, seeing its significance for commercial transactions and import bills. But the index aims to offer a stable indicator, showing the fair value of the EGP in comparison to other currencies.
- The index could be launched in Q1-2024 and that move will help strengthen Egypt’s position in front of the IMF
when the time comes to review the health of the economy ahead of unlocking more tranches of our 3 billion USD facility. The Central Bank of Egypt governor Hassan Abdalla last year floated the idea of setting up a currency index against which to value the EGP. The index, he said at the time, would be made up of several currencies and potentially gold. Egypt needs to stop “measuring” the EGP against the greenback to help people get used to the idea of a free-floating currency that is not pegged to the USD, Abdalla said at the time. (Bloomberg & Enterprise)
- In addition, Egypt’s spending on interest rates among reasons for elevated debt: IMF.
Egypt's elevated debt in FY2023/2024 is the result of several factors, including high spending on interest rates. Moreover, the spending on interest rates is projected to rise over the coming years. Egypt’s gross debt-to-GDP ratio to hit 92.7%, the highest among emerging markets and middle-income economies in FY2023/2024. This is Egypt’s highest government gross debt since 2017 when it posted close to 98%. (Hapi Journal)
- Egypt studies offers from Orascom Construction, Scatec for 6-GW wind energy projects.
An Egyptian government committee is currently studying two separate offers submitted by Orascom Construction Plc’s and Norwegian Scatec’s consortia to implement wind energy production projects in Egypt until 2029. The projects aim to generate a total of 6 gigawatts (GW) of wind energy. Orascom Construction is seeking to activate a previously signed memorandum of understanding (MoU) with the Egyptian Electricity Transmission (EETC) to generate 3 GW of wind energy. Meanwhile, a source at Scatec noted that the company is considering activating wind energy production projects in Egypt over the coming period with investments of 5 billion USD. (Asharq Business)
- Egypt targets boosting green investments to 50% in FY2024/25: Maait.
The value of Egypt’s total green investments doubled in fiscal year (FY) 2019/2020 to 30%, compared to the previous FY, with the government targeting to bring this percentage up to 50% in the coming FY. Moreover, Egypt is targeting to scale up its renewable power supplies to 42% by 2035. The minister announced that the launch of a new initiative to inject larger sums of green investments into developing countries is underway. He added that the initiative would also mitigate the debt burden endured by these countries. (Arab Finance)
- Moving to our Real Estate sector, Egypt real estate projects tie for second highest value in MENA.
Egypt and the UAE shared the second-place spot for value of ongoing real estate projects in the Middle East and North Africa (MENA) region in H1-2023. Saudi Arabia came first with a value of 1.3 trillion USD. Collectively, Egypt, Saudi Arabia, and the UAE accounted for 60% of total projects under construction in the MENA region during the same perood, JLL’s report showed. The recent figures show Egyptian real estate market performing positively despite the current economic crisis in the country. The value of real estate projects launched in Egypt is expected to grow by an average annual rate of nine percent between 2024 and 2027, per the JLL report. (Egypt Business Daily News)
- Moreover, Egyptians Abroad Corporation, led by prominent expats, to invest in real estate, energy, and agriculture.
The Egyptians Abroad Investment Corporation, led by influential Egyptian expats, plans to invest in various sectors such as real estate, energy, and agriculture. The firm, which has ten founders who are prominent Egyptian businesspeople living abroad, operates primarily in Egypt. Shares of the company are to be listed on the Egyptian Stock Exchange and a few international exchanges. (Egypt Business Daily News)
Stay up to date
More Newsletter to Check
SUBSCRIBE TO NEWSLETTER
Subscribe to download our daily economics and business roundup
×
![]()