The efforts of the Egyptian government to ramp up growth has been boosted by a $1.5 billion loan which has just been approved by the African Development Bank (AfDB).
International Cooperation Minister Sahar Nasr told Reuters that the loan will be paid out in three tranches of $500 million each over three years and will be spent towards the government’s economic development programme and national projects.
“We have a competitive economic reform programme that started more than a year back and based on that we are taking the first tranche,” Nasr said.
Egypt’s economy has struggled since the Arab Spring but with stability returning to the country after Abdel Fattah el-Sisi became president in June 2014 bringing in bold initiatives to restore the country ravaged by years of revolution. The country’s credit rating (issuer and senior unsecured bond ratings) was upgraded by Moody’s Investors Service in April to B3 from Caa1, with a stable outlook.
According to Moody’s, it upgraded Egypt’s rating due to the country’s improving macroeconomic performance, reduction in external vulnerabilities, and ongoing commitment to fiscal and economic reform.
AfDB representative Leila Mokaddem said the $1.5 billion loan confirms the regional lender’s confidence in the Egyptian government’s reform process. “The bank’s approval today is a strong message affirming that the Egyptian economy is moving at a steady pace towards achieving comprehensive development…,” Reuters quoted Mokaddem to have said.
Apart from the AfDB loan, Egypt also expects to receive an additional $1 billion from the World Bank by the end of the year to support its budget.