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Tuesday, 29 October 2019

Egypt and IMF continue talks for post-loan agreement

IMF’s Azour confirms talks are ongoing with Egypt on post-loan cooperation: Egypt and the IMF are currently in talks to set the parameters of a potential future engagement once our USD 12 bn Extended Fund Facility expires next month, the IMF’s Middle East and Central Asia Director Jihad Azour tells the National. The talks appear to be in the very early stages, as Azour says the fund is still looking with Egyptian officials at the priorities for future reform plans to define the type of arrangement. Azour remained tight-lipped on when we should expect to see an agreement, saying only that negotiations are “progressing.”

Where do our reform priorities lie moving ahead? Egypt’s next stage of reforms should foster business growth by “reforming the business environment, allowing the private sector access to greater market share and by improving the environment for doing business in Egypt," Azour said. He also stressed the importance of pushing ahead with structural reforms to increase growth and create jobs, while “allowing the private sector greater market share” and curbing state involvement in the economy. Azour pointed to education investment as a key part of Egypt’s path forwards.

Background: The Finance Ministry has said that Egypt is eyeing a post-loan agreement with the IMF, and initially said we could sign said agreement by this month. The ministry said at the time it was eyeing a two-year cooperation framework, but officials from the fund swiftly poured cold water on the idea, saying that Egypt would have to complete its current program before trying to get a second helping. More recent statements indicate that the government is hoping to secure the agreement by March 2020.

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