VENTURES AFRICA – An IMF taskforce would stopover in Egypt this month for discussions on a $4.8 billion loan deal that was suspended last month at Cairo’s request following political tumult in the country.
Government spokesman Alaa el-Hadidi confirmed this on Friday morning saying: “They are coming this month.”
“The purpose is to reassure them that what we agreed on last time is still there, and nothing has changed,” he told Reuters.
In November last year, Egypt reached a preliminary pact with the IMF for a $4.8 billion loan.
This was seen as a vital step to supporting the nation’s finances and a stamp of approval to the government’s economic recovery programme.
In 2011, investors abandoned Egypt during the political turmoil that followed the overthrow of former president Hosni Mubarak and they have been praying that the IMF support the government financially.
At the time the IMF deal was announced, Egypt’s benchmark index pared its losses and the cost of insuring Egyptian debt against default fell.
The deal included agreement to rein in Egypt’s budget deficit with measures including tax changes targeting the wealthy.
The government also said there would be more careful spending on subsidies intended to help the poor.
The government has repeatedly said its programme would protect the poor, many of whom rely heavily on subsidised food and other essentials. The rebellion that overthrew Mubarak was prompted by calls for social justice and political freedom.
Egypt needs economic growth to revive to the pace of 6 percent or more that it was achieving in the years before Mubarak’s overthrow.
Growth slipped to just over 2 percent in the year to June 30 2012.