LONDON: Egypt has postponed any decision on taking a $4.8bn loan from the IMF as financial aid from Gulf states has given Cairo some breathing space as it starts to conduct economic reforms, Deputy Prime Minister Ziad Bahaa El Din said yesterday.
Bahaa El Din said Egypt has so far received around $8bn of a $12bn aid package from Saudi Arabia, Kuwait and the United Arab Emirates promised in July, days after the army toppled president Mohammed Mursi.
The International Monetary Fund and Egypt have sporadically discussed a possible loan worth up to $4.8bn to help the ailing economy since a 2011 uprising that toppled president Hosni Mubarak drove away tourists and foreign investors, two main sources of foreign currency.
Any IMF deal, however, would require economic reform commitments that the government might find politically risky.
“We have postponed that (IMF) decision for the time being. We are not under the extreme stress that the previous government found itself in,” Bahaa El Din told a conference in London.
“The assistance that we have from abroad ... This is money that has come at the right time to give us the breathing space to begin to implement those decisions at the pace and in conditions that are much more favourable than when you are pressed to have to sign an agreement today or tomorrow.”
Bahaa El Din said Egypt was expecting to receive $1bn in aid from Kuwait but did not say when the cash could arrive.
Some $3bn out of total $5bn aid from the UAE will be channelled through infrastructure and utility projects.
He said Egypt is negotiating for more aid from the Gulf which has so far given the country cash transfers and oil shipments. On top of $8bn, Egypt’s central bank has received deposits from the Gulf to improve liquidity.
“Now we all understand and appreciate that this is not a sustainable situation, we are not going to rely every year on getting this kind of money,” Bahaa El Din said.
Reuters
