Egypt expects to receive $1.5bn from the World Bank and African Development Bank by year-end to support the budget and could discuss potential IMF financing once parliament convenes, International Cooperation Minister Sahar Nasr said.
Egypt is implementing a series of reforms aimed at reviving its economy after the 2011 uprising that ended Hosni Mubarak’s 30-year rule frightened off tourists and foreign investors, on which it relies for foreign currency earnings.
Foreign currency reserves, which stood at about $36bn before the uprising, were $16.42bn at the end of November despite billions of dollars in Gulf aid that Egypt has received since mid-2013.
A foreign currency shortage has crippled import activity this year and the country is struggling to pay for supplies of energy, which drain some $700mn to $1bn a month.
The minister said she had negotiated loans with the World Bank and AfDB worth $3bn and $1.5bn respectively, to be disbursed over three years with the first tranche arriving “within days” of the deals being signed later this month.
The economic reform programme Egypt launched in June 2014 helped it secure the aid without a list of specific conditions.
“If you already have done an integrated reform programme with a clear timeline ... you would not call it a conditionality because it has already been achieved,” Nasr told Reuters on the sidelines of the Egypt Mega Projects conference in Cairo last week.
She said the first effect of the loan would be to bring much-needed foreign exchange into Egypt: “There are three main advantages to this programme. First, it will bring in foreign currency, quick foreign currency.”
Though the money has not been ring-fenced to help Egypt pay some $2.7bn owed to international oil companies or to purchase petroleum products, it will ease pressure on foreign reserves and implicitly free up more cash for energy imports.
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