Cairo- Make a decision International Monetary Fund Merging the fifth and sixth reviews of the Egypt Financial Support Program of $ 8 billion, for the next fall, questions about the backgrounds of this sudden step, and its potential repercussions on efforts Cairo To achieve economic stability, and its ability to implement the fundamental reforms demanded by the fund.
The Fund spokeswoman, Julie Cosak, said in press statements that the discussions indicated the need for more time to finish the touches of the main policy measures, especially those related to the role of the state in the economy, and to ensure the possibility of achieving the decisive goals of the economic reform program.
A mission from the International Monetary Fund visited Cairo between 8 and 16 May last in the framework of its fifth review, and indicated that the completion of the review will take place from the Fund’s headquarters in Washington.
According to a statement of the mission, “With the stability of the total economy currently, it is necessary for Egypt to make deeper reforms to unleash the potential of growth in the country, create high -quality jobs for increasing number of population, sustainable reduction in weaknesses, and increase the economy’s ability to confront shocks.”
He added: “To achieve these goals, reducing the role of the public sector in the economy should be decisively, and providing equal opportunities for all economic parties, one of the main priorities of policies. The implementation of the state’s ownership policy and the investment exit program in the sectors – which the state committed to reducing its existence will play a decisive role in enhancing the ability of the private sector to contribute better to economic growth in Egypt. In continuation, it is necessary to continue efforts to improve an environment in it Business.
The fund approved its fourth review of the program in March, which allowed the payment of a payment of $ 1.2 billion.
The fund is conducting reviews for the Egypt program every 6 months in a pre -determined schedule.
What is the position of the Egyptian government on the decision of the International Monetary Fund?
The Egyptian government has not yet issued any official comment on the fund’s decision, which increased the state of ambiguity and anticipation on the reasons behind not fulfilling its reform obligations in the short term, and its options to overcome the crisis.
Why the IMF merge the fifth and sixth autumn review?
In a large part, the decision is due to the improper progress made by the government in major axes, including reducing the state’s imprint in economic activity, ensuring equal opportunities, and improving the business climate.
The fund emphasizes that the priorities of the current stage focus on activating the policy of state ownership and accelerating the program of exit from assets in the sectors that the government has expressed its intention to withdraw, and the fund believes that these steps are essential to enabling the private sector to lead stronger and more sustainable economic growth in Egypt.
Despite the decision to integrate the two reviews and the consequent postponement of the payment of the fifth financial segment, the fund believes that Egypt continues to make progress within the framework of its total economic reform program, pointing to noticeable improvements in inflation and the level of foreign exchange reserves that have risen.
What does the IMF decision mean to postpone the fifth review and integrate it with the sixth?
According to the Fund’s spokeswoman, the integration decision aims to give the authorities more time to complete the basic procedures, especially reducing the role of the state in the economy, and accelerating the implementation of the government proposals program, as well as moving forward in structural tax reforms.
The integration decision would postpone the disbursement of a new financing segment, whose size was not determined, but the fourth segment was 1.2 billion dollars, bringing the total amounts provided by the fund to Egypt about 3.5 billion dollars since the program began in March 2024.
Last week, the Egyptian House of Representatives approved new amendments to the VAT law, including contracting, cigarettes and alcoholic beverages, as well as creating a valuable tax added to crude oil.
Is it the first time that the IMF has decided to postpone its review of Egypt?
“The Fund’s decision is not the first of its kind for Egypt, but it is negative in the short term, and it carries a clear indication of the lack of tangible progress in the government’s pledge to reduce the state’s imprint in economic activity and make way for the private sector, and the fund sees in tax reforms merely” administrative “and not” structural “steps.
Regarding the impact of the decision on the Egyptian economy, Fouad explained to (Al -Jazeera Net) that the integration of the fifth and sixth reviews of the IMF program, and then the delay in the disbursement of the new financing segment will constitute more pressure on the balance of Egyptian payments, in light of the government’s dependence on these segments to pay part of its financial obligations, especially the existing loan installments.
What are the repercussions of postponing the disbursement of the fifth segment on the Egyptian economy?
Anxiety was not limited, according to Fouad, on the internal financial side, but rather extended to external financing partnerships; He warned of the possibility of the second tranche to be affected by support European Union Due to its close association with the continued coordination with the IMF.
He was European Parliament In April 2025, he agreed to exchange 4 billion euros (4.68 billion dollars) as a second segment of a total financial support package of 5 billion euros (5.85 billion dollars), after Egypt received one billion euros ($ 1.17 billion) of them last December.
Despite these observations, Fouad ruled out that the decision to delay leads to a crisis in the exchange rate or a lack of foreign currency, stressing the presence of strong flows of hot funds, and a remarkable recovery in tourism, as well as the high transfers of Egyptians abroad.
Was the decision to postpone the fifth review suddenly for Egypt and why?
Economist Ibrahim Nawar said that the International Monetary Fund’s decision to integrate the fifth and sixth reviews came contrary to the expectations of the Egyptian government, explaining that “the main reasons behind this step are to slow down the implementation of structural reforms, foremost among which is to reduce the role of the state in the economy, and the failure to raise the tax proceeds to about 15% of the gross domestic product, as it is still at 13%.”
Nawar pointed out, in statements to (Al -Jazeera Net), that the fund demanded to review the list of value -added exemptions, as well as review the privileges granted to some entities such as the sovereign investment funds.
What is the Egyptian government’s vision to increase the tax proceeds?
In this context, Parliament last month acknowledged a protocol that exempt the sovereign Egypt Fund and the “Holding” company of the Abu Dhabi Fund, which was considered by the expert “a blatant challenge” of the demands of the fund related to tax justice, while the government’s vision to increase the tax revenue shows that it is “expanding the tax base”, which in practice means increasing the tax burdens and fees for citizens.
Did the Egyptian government make progress in the proposal program?
Despite the government’s pledges, the government proposals program ranges in its place, as the fund believes that the loan granted to Egypt is not just financial support, but rather a structural reform tool aimed at empowering the private sector, and the state’s exit from direct economic activity, and Nawar believes that the fund is not satisfied with the pace of implementation, and is pressing in the direction of accelerating exit and activating free competition in the market.
What is the volume of financial pressure on Egypt and the future of expectations?
The economist warned that the postponement of the payment of the following segment represents an additional challenge for public finances, especially since the government was counting on the amount to pay obligations in favor of the fund, so the options are in front of Egypt It will be limited to issuing new sovereign instruments or resorting to international loan markets at high interest rates.
Nawar concluded that this difficult financial reality, along with the high interest policy, will lead to survival Inflation At high levels, which imposes additional pressure on the pound and makes the start of the new fiscal year very difficult.
What has Egypt achieved from the proposal program so far?
Since last December, Egyptian Prime Minister Mustafa Madbouly announced a plan to launch at least 10 government companies during the year 2025, including 4 army -affiliated companies (Wataniya, Safi, Shell Out, and Silo), but these promises have not yet been translated into actual steps on the ground.
Egypt has achieved 6 billion dollars through the implementation of 21 transactions since the start of the government offering program over the past four years, despite the joining of the International Finance Corporation, which is working as a strategic consultant for the government in the proposals program.