Egypt races to meet IMF requirements ahead of September scheduled review
The second review is scheduled for mid-September, however the first review still has not been conducted since its postponement in March.
"I expect the first and second reviews to be conducted ahead of the 2023 Annual Meetings of the World Bank Group and IMF in Morocco on 8 October," economist Hany Abul-Fotouh told Ahram Online.
"The IMF requires more serious steps from Egypt with regard to the reform programme; the postponement of the reviews won't be healthy for the Egyptian economy," added Abul-Fotouh.
The Egyptian government plans to offer stakes in 35 state-owned companies to strategic investors by the end of June 2024, under the State Ownership Policy Document. The programme has collected $5 billion to date, with another $5 billion in deals in the pipeline.
"The government's IPO is progressing slowly and exchange rate reforms are even slower," stated Mohamed Hassan, investment funds director at Odin Investments.
"However, the government is taking big steps in privatization and more huge deals in lucrative state-owned companies are on the way," Hassan said.
The IMF has demanded significant progress on Egypt's IPO programme and a devaluation of the country's currency.
On that front, Abul-Fotouh and Hassan both expect the government to devalue the currency in the coming period, despite the impact of recent successive waves of inflation on Egyptians.
It is worth noting that the Egyptian pound's exchange rate against the USD has fluctuated frequently since March 2022, on the heels of the Russian-Ukrainian war.
The USD/EGP rate jumped from EGP 15.7 to EGP 18.56 in March 2022, then moved gradually to EGP 19.66 until 28 October, when it surged to EGP 23.15. By March 2023, the USD stood at about EGP 30.9, where it remains until today.
"Another movement in the exchange rate of the pound will further burden Egypt's budget with inflated import costs. Therefore, the IMF's review in September may be postponed," banking expert Mohamed El-Beih told Ahram Online.