By Nada Badawi
An International Monetary Fund (IMF) staff mission concluded a two-week visit to Egypt on Monday without reaching a deal on the proposed $4.8bn loan package.
Despite not reaching an agreement, Mission Chief for Egypt Andreas Bauer said in a statement: “The mission made progress in the discussions with the Egyptian authorities on their economic programme and possible financial support from the IMF.”
The mission has been holding talks in Egypt with officials and political figures since 2 April, discussing the country’s economic reform programme which was stipulated by the IMF for Egypt to secure the loan.
The programme involves strict measures to tackle the budget deficit, which is reflected in the country’s draft budget for the coming 2013-2014 fiscal year.
“The authorities have already taken valuable first steps to improve the targeting of energy subsidies and are seeking to broaden their revenue base,” Bauer said. “They intend to build on these steps with further actions to address, in a socially balanced way, the country’s fiscal budget and balance of payments deficits, and create conditions for a sustained recovery of the economy.”
Since 2 April talks have been held with Prime Minister Hesham Qandil, Governor of the Central Bank of Egypt Hesham Ramez, Minister of Finance Al-Morsi Hegazy, and Minister of Planning and International Cooperation Ashraf El-Araby.
The IMF also met with opposition figures Hamdeen Sabbahi and leader of Freedom Egypt Party Amr Hamzawy.
“All sides concurred on the need to protect the vulnerable sectors of society when implementing reform measures,” said Bauer in reference to the mission’s talks with political parties to support the loan.
While the mission was in Cairo, the Egyptian government received a combined $5bn in financial support from Qatar and Libya.
Finance Minister Al-Morsi Hegazy will travel to Washington on 20 April to attend the annual joint spring meeting with the IMF and the World Bank, in order to resume negotiations over the loan, according to a Finance Ministry press release.
“We are travelling to the spring meetings in Washington in the next two days and are going to be there in the coming week and will complete the negotiations there, and after we return, the IMF mission return to Egypt in order complete some of the negotiations,” El-Araby said in a television interview, Reuters reported.
“Discussions with the authorities will continue with the objective of reaching agreement on a possible Stand-By Arrangement in support of Egypt,” Bauer stated.
The government has been anticipating the loan for almost two years now, believing that the IMF package could help stabilise the economy, while unlocking further billions in aid and investment.
But IMF negotiations were postponed several times due to political instability in Egypt.
Foreign currency reserves have shrunk to a critically low $13.4bn since the 25 January Revolution and the Egyptian pound has lost about 10% of its value against the US dollar.
Meanwhile, Tunisia signed a $1.78bn loan deal with the IMF on Monday.