Egypt: IMF ready to give loan
Despite the threatened stability in Egypt, the International Monetary Fund (IMF) is willing to provide loans if it is deemed necessary by authorities in Cairo. Egypt is going through political, economic and financial crisis as political differencescontinues to be the center stage. IMF’s regional director, Massod Ahmed, said they are “keen to support” the North African country after the failure to agree on a $4,8 billion loan with the previous government.
Egypt’s economy has been backtracking since the revolution began three years ago. The arrival of Morsi in power and his efforts to acquire a loan from the IMF was received with violent reactions. The loan was linked to several economic reforms amongst which are the subsidy policies. Egyptiansrose against the deal in what could be termed as the beginning of the fall of Morsi government.
Last month, the finance ministry of the current government which is backed by the military requested for technical meetings with the IMF for a likely introduction of a Value Added Tax system.
IMF’s Director for the Middle East and North Africa, Masood Ahmed, has confirmed that “technical work” between them has started. He added that they will “be very ready and keen to support” Egypt. Masood concluded that the Egyptian government will decide “when they think the time is right in terms of financing” from the IMF.
However, regional chief economist Farouk Soussa of Citigroup said that Egypt doesn’t need a loan from the IMF. He opined that it is nevertheless obliged to seek for one because of the technical help it needs from theinstitution. He likened the idea of IMF aid to Egypt as “a hot potato…and a bit of a political liability in Egypt.”