IMF will lend a helping hand to Egypt to close $17bn financing gap over 4 years

The International Monetary Fund approved a $3 billion loan agreement to help Egypt close a $17 billion financing gap over the next four years, the Washington-based lender also set reforms plan for the North-African nation to catalyse additional funding, IMF said in its staff report released on Tuesday.

The IMF board of directors approved the 46-month Extended Fund Facility (EFF) on Dec. 17 and released the first $347 million.

The IMF-supported reform programme is expected to secure an additional $14 billion from Egypt’s international and regional partners, including GCC countries.

“The [Egyptian] authorities’ favourable track record under previous Fund-supported programmes and commitment to strong policies should support a solid rebound and restoration of full market access over the medium term,” the IMF said.

However, it warned of substantial risks, including the effects of Russia’s war in Ukraine, commodity price shocks and stagflation.

The programme will be monitored through semi-annual reviews until the end of 2026, with the first review expected to be completed around March 31 and the second around September 30 this year.