Egypt requests IMF loan

Egyptian officials have asked International Monetary Fund for $4.8bn loan to help boost country’s ailing economy.

Hashem Qandil
Hisham Qandil said that Egypt will have the final say as to how the loan would be spent [Reuters]

Egyptian officials have requested a $4.8bn loan to help boost the country’s economy in a meeting with Christine Lagarde, the managing director of the International Monetary Fund (IMF).

Lagarde met with President Mohammed Morsi and Prime Minister Hisham Qandil on Wednesday to discuss the loan and review both Egypt’s economic reform programme and the government’s economic stimulus plan.

Egyptian television reported the request by Egypt, though Lagarde would not confirm it.

“We did not discuss the details about the amount or the conditions,” Lagarde told a press conference with Qandil.

“The prime minister has a certain number, but the amount will depend on negotiations between the IMF team and Egyptian officials.

“I took note of their strategy and ambition for Egypt’s economic and social future, and I assured them of our continued commitment to support Egypt and its people during this historic period of transition,” she said.

Qandil said that Egypt had the final say of how the money would be spent. 

Egypt had made a request for a $3.2bn loan earlier this year. The loan agreement was supposed to be signed in the spring, but it was postponed by disagreements between the now-dissolved parliament and the former government, which was formed by the military council before the presidential elections.

‘Considerable challenges’

“The IMF has maintained a close dialogue on economic policy with the Egyptian authorities since the start of the transition and provided considerable technical assistance upon request from the government,” Lagarde said in a statement released after the press conference.

In January of 2011, Egypt declined loans from both the IMF and the World Bank after Qatar and Saudi Arabia gave the country large cash gifts – $500m in Qatar’s case – as a gesture of budgetary support.

A technical team will be arriving in Cairo in early September to work with the authorities on their programme and discuss possible forms of financial support from the IMF.

“Egypt faces considerable challenges, including the need to restart growth and reduce budget and balance of payments deficits. Getting the country’s economy back on track and raising the living standards for all will not be an easy task,” said Lagarde.

Dozens of leftist protesters gathered near the cabinet headquarters in central Cairo to protest Lagarde’s visit and condemn what they called IMF “conditions that only serve businessmen”.

They blame the IMF and the World Bank for a privatisation programme executed by the Mubarak regime.

Source: News Agencies