The negotiation between the Egyptian government and the IMF is going smoothly, said the Minister of Finance Mohamed Moeit, during his speech at the third annual MENA investor conference, organized by CI Capital on Sunday. He stressed that the next IMF loan tranche worth $2bn will be disbursed to Egypt soon.
Egypt should have received the $2bn loan tranche last December but the IMF delayed the disbursement until discussions of some details about the country’s planned reform measures were over.
The minister noted that the government is currently discussing the new free indexation mechanism for oil products pricing, adding “each mechanism differs from its counterparts in other countries. Some products will remain subsidised due to its direct relation with some social segments.”
Moeit added that his ministry aims to expand the tax base, so it agreed with Ernst & Young to finish a study for simplifying the tax procedure.
“We also presented a proposal for new organisational structure. We are in the final stage of drafting a new law that defines all the tax procedures, including income and value-added tax. The new draft law will be available for social discussion over the next two weeks.”
Furthermore, Moeit said that the average growth became higher and more resilient, the market is more flexible, and foreign currencies are available, referring to the government plans to increase the efficiency of the business sector and launch comprehensive social assistance packages.
“In the past period, there were many changes in the petroleum products’ prices, which helps in achieving the government plans to reduce the fuel subsidy and increase spending on social programmes,” added Moeit.
Unemployment rates declined to more than 9% recently, and there will be a further decline in the fiscal year (FY) 2018/19, mentioned the minister, adding that the overall deficit will decline to 7% by the end of FY 2019/20 compared to 8.4% by the end of the current FY.
The minister noted that he will travel to South Korea and China to promote foreign bonds for the Asian investors, adding that a delegation from the finance ministry has travelled to Japan and Singapore for the same purpose.