Egypt will receive USD 2.75 bn as a first tranche of funding from the IMF once the agreement is signed, followed USD 1.25 bn in April-May 2017 after the first revision, the Finance Ministry said. The USD 12 bn package is payable over 10 years, including a 4.5-year grace period, through 12 instalments. The funding’s interest and service fees stand at 1.55-1.65%, the Ministry says. Finance Minister Amr El Garhy said the government will focus on structural reforms and on supporting domestic industries, particularly exporters. Deputy Minister Ahmed Kouchouk says the economic reform program targets GDP growth of 5.5% in FY 2018-19 and to reduce the primary deficit from 3.4% in FY 2015-16 to a primary surplus by FY 2017-18.

As for the fiscal deficit for FY2017-18, the Finance Ministry is looking to reduce that to 8.5-9.5% from a projected shortfall this year of 9.8% of GDP, according to its guidelines for preparing next year’s budget released on Sunday. Fiscal and structural reforms are expected to reduce public debt to 92-94% for the FY17-18 year. The 62-page sheet, which reprioritized fiscal spending based on the reform agenda, instructs the ministries of health, housing, social solidarity, ICT, transportation, and higher education to apply key elements of the reform plan when preparing their budgets for the next fiscal year.

Signing the IMF agreement could “trigger an inflow of international investments,” Mahmoud Kassem writes for The National. EFG Hermes’ strategist Simon Kitchen says, “For many investors, the IMF agreement is the green light for investors because for many of them it was ‘I won’t believe it until I see it’ … Egypt has signed preliminary agreements with the IMF in the past five years, staff level agreements, but this is the only one that has been sealed.” The outlook for Egypt is probably at its best since 2011, says Mohamed Jamal, capital market managing director at Waha Capital, but notes that “there are still risks ahead in terms of pick-up in inflation, social acceptance of these reforms, delivery on the fiscal tightening linked to the IMF programme.”

Elsewhere yesterday: EFG Hermes’ Mohamed Abu Basha got the not to speak with Marcus Cranny and Tracy Alloway on Bloomberg’s morning show (watch, run time 5:31).