The International Monetary Fund announced on Tuesday that it and Egyptian officials had achieved an agreement that would provide Egypt access to roughly $1.2 billion.
The executive board must approve the money access.
“The Egyptian authorities have continued to implement key policies to preserve macroeconomic stability, despite ongoing regional tensions that are causing a sharp decline in Suez Canal receipts,” said Ivanna Vladkova Hollar, who led the IMF mission involved in discussions with Egyptian authorities.
She stated in a statement that “continued implementation of fiscal consolidation efforts will be necessary to preserve debt sustainability, and reduce large interest costs and gross domestic financing requirements.”
According to the fund, the agreement was reached at the staff level for the fourth review under the Extended Fund Facility arrangement.
Although the government’s initiatives to simplify and streamline the tax system were praiseworthy, Vladkova Hollar added that “further reforms will be needed to enhance domestic revenue mobilization efforts.”
“A comprehensive reform package is needed to ensure that Egypt rebuilds fiscal buffers to reduce debt vulnerabilities, and generates additional space to increase social spending, especially in health, education and social protection,” said Vladkova Hollar.
The negotiations that resulted in the agreement took place both in person and digitally between November 6 and 20.
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