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Sunday, 12 July 2020

IMF mission chief praises Egypt for resilience-enhancing reforms, plans for crisis spending and post-covid recovery

IMF mission chief praises Egypt for resilience-enhancing reforms, plans for crisis spending and post-covid recovery: Egypt has taken a “proactive” approach to limiting the economic fallout from the covid-19 pandemic by seeking assistance from the multilateral lender through a two-part USD 8 bn financing package, IMF Egypt mission chief Uma Ramakrishnan said. The funding — which includes a USD 2.8 bn Rapid Financing Instrument and another USD 5.2 bn, 12-month standby loan — allowed the government to both address immediate spending needs to address the outbreak and avoid undoing progress made under its previous reform program, Ramakrishnan said. This approach will also help the country “further advance structural reforms to position Egypt for sustained recovery,” particularly as the program helped to increase Egypt’s resilience and weather the crisis.

“The government’s goal is to place Egypt on a strong footing for recovery,” she said. While state spending on healthcare and social safety nets has increased since the onset of the pandemic, the government is wary of becoming encumbered with debt down the line. The Finance Ministry is currently reworking its debt strategy — which it began implementing in March 2019 and entails moving towards longer-term debt and imposing a cap on eurobond issuances, among other things — according to Ramakrishnan.

Egypt is also committing to greater transparency in its crisis spending, Ramakrishnan said. To that end, the government will publish the details of its spending during the crisis on the Finance Ministry website and will also disclose procurement contract details.

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