Egypt has requested financial and technical support from the International Monetary Fund (IMF) as the country faces the economic implications of the coronavirus (COVID-19) pandemic, Prime Minister Mostafa Madbouly said.
Madbouly’s comments came during a Sunday conference, in the presence of the Chairperson of the Board of Directors at the Central Bank of Egypt (CBE), Tarek Amer, and a number of ministers.
The government is looking to supply and strengthen Egypt’s economy as the country fights the ongoing pandemic, Madbouly added, noting that Egypt aims to continue its multi-sectoral structural economic reforms.
Egypt had asked for IMF technical support at the beginning of 2020 before the coronavirus outbreak. Although the country’s financial conditions were very good, the current circumstances require financial support to preserve the outcomes of the reforms, Madbouly added.
Egypt had implemented an economic reform programme between 2016 and 2019, with $12bn in financial support from the IMF.
“We wanted to take proactive steps for a year in case the COVID-19 crisis continues, and to avoid its impacts, which have interrupted many sectors of the Egyptian economy,” Madbouly said, “This prompted us to develop the discussions with the IMF to include a financial aspect with technical support.”
Egypt’s banking sector has prepared well for all economic challenges, Amer said during the conference. He added that the sector plays a major role in supporting the national economy in its fight against the coronavirus, as bank capital has been built up over the past few years to EGP 450bn.
The banking sector’s volume of liquidity amounts to EGP 1trn, Amer said, with economic reforms helping the government overcome challenges with minimal damage.
Amer added that the IMF is enthusiastic to cooperate with Egypt because of its successful economic reforms.
The planned programme with the IMF will take place over one year, he said, adding that the country’s foreign exchange reserves can withstand the crisis for more than two years.
The previous economic reform programme implemented in coordination with the IMF has achieved great success, Minister of Finance Mohamed Moeit said during the conference.
Moeit also said that the government is looking to maintain the good performance of the Egyptian economy’s indicators.
The economy is able to recover quickly and return to rapid growth rates, Moeit said, whilst emphasising that the current economic performance is good.
Minister of Planning and Economic Development Hala El-Said said the economy was at its best conditions before the coronavirus crisis. The pandemic has, however, negatively impacted many sectors that witnessed a total or partial closure.
A 4.2% economic growth rate is anticipated by the end of fiscal year (FY) 2019-2020, she said. She also said that the world will see huge changes following the pandemic, with Egypt likely to focus on sectors such as distance learning.
The government is coordinating with several international financial institutions to highlight the state efforts against the coronavirus, Minister of International Cooperation, Rania Al-Mashat, said. Minister Al-Mashat added that the current crisis requires a boost to the international cooperation.