Egypt on IMF Meeting Schedule for March 10 to Disburse $1.2 Billion

The International Monetary Fund (IMF) has set March 10 as the date for the fourth review under Egypt’s Extended Fund Facility (EFF) arrangement.

The IMF said in December it had reached a staff-level agreement with Egypt on the fourth review under the EFF arrangement, potentially unlocking $1.2 billion under the program.

Egypt, which is struggling with high inflation and a shortage of foreign currency, agreed to the $8 billion, 46-month facility in March, with a sharp drop in Suez Canal revenues caused by regional tensions over the past year having exacerbated its economic plight.

The IMF said the Egyptian government had agreed to increase the tax-to-revenue ratio by 2% of GDP over the next two years, with a focus on removing exemptions rather than raising taxes.

This would give it room to increase social spending to help vulnerable groups, the IMF added in a statement.

“While the authorities’ plans to simplify and streamline the tax system are commendable, further reforms are needed to strengthen domestic revenue mobilization efforts,” the statement continued.

The IMF statement added that Egypt agreed to make more determined efforts to ensure that the private sector becomes the main engine of growth and to maintain its commitment to a flexible exchange rate.

The IMF Executive Board has yet to approve the staff-level agreement on the fourth review.