Egypt obtains approval for payment of another $2billion in a $12 billion IMF loan

Egypt is to obtain another $2 billion of a $12 billion loan from the International Monetary Fund (IMF), following the financial institution’s approval of payment on Thursday.

Citing accelerating growth and a declining current account deficit as reasons for the decision to make another payment, IMF in a statement said, “Egypt has begun to reap the benefits of its ambitious and politically difficult economic reform program.

“Annual headline inflation has declined from 33 percent in mid-2016 to around 13 percent in April.”

Egypt launched a reform program when its economy faced rising imbalances that led to high public debt, a widening current account deficit and declining official reserves. To support the home-grown reforms, the government embarked on an IMF-supported program to restore the stability of its finances, promote growth and employment, while shielding the poor from the adverse effects of the changes.

IMF in late 2016 approved a three-year $12 billion bailout program to jumpstart Egypt’s struggling economy that is currently undertaking tough reforms. The latest payment, which remains subject to IMF executive board approval, will bring total disbursements under the agreement to $8 billion, Reuters reported.

Last year, Egypt floated its currency and reduced energy subsidies as part of an ambitious economic reform program outlined under the terms of the loan. Since then, the Egyptian pound has approximately halved in value and inflation has soared to record highs in what is widely acknowledged to have been a challenging adjustment period.

The International Monetary Fund (IMF) said that Egypt’s GDP growth is strengthening and inflation has begun to decline, indicating that the country’s reform program has started to bear fruit. Apart from the government program with aid the IMF, World Bank recently announced plans to invest $500 million on Egypt’s education reforms in a bid to expand access to early education using technical innovations in line with Egypt’s vision 2030.

Egypt’s vision 2030 is to provide quality education and training system available to all, without discrimination, within an efficient, just, sustainable and flexible institutional framework, while providing the necessary skills to students and trainees to think creatively, technically and technologically.

World Bank’s support for reforming Egypt’s education system also promises to boost access to quality education for half a million children in kindergarten, training half a million teachers and education officials and providing 1.5 million students and teachers with digital learning resources.