IMF postpones discussion of Egypt's third loan tranche disbursement

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Arab Finance: The International Monetary Fund (IMF) has postponed discussing the disbursement of the $820 million third tranche of the loan to Egypt to July 29th, instead of at its scheduled meeting on July 10th, Asharq Business reported.

This decision was made because certain conditions have not been met, Ivanna Vladkova Hollar, IMF Egypt Mission Chief and Division Chief at the Middle East and Central Asia department, said.

The IMF said that the third review requires Egypt to meet several conditions, including issuing the executive regulations of the public finance management law and publishing annual audit reports from the Central Auditing Organization (CAO) on financial accounts.

The review also requires the state to implement a plan to recapitalize the Central Bank of Egypt (CBE) and evaluate recapitalization needs in consultation with IMF staff.

Additionally, Egypt must complete compliance with Egyptian accounting standards.

Other requirements include developing a payment strategy to settle the Egyptian General Petroleum Corporation’s (EGPC) arrears, ensuring no new arrears accumulate, launching an indicator to track the implementation of the state ownership policy by June 2024, and publishing a comprehensive annual report on tax expenditures by April 2024.

In this regards, Prime Minister Mostafa Madbouly announced that the government is working out a plan within a month to schedule the remaining overdue payments to foreign oil companies.

He also mentioned that the government recently paid between 20% and 25% of the arrears owed to these companies.

In June, the IMF and Egypt reached a staff-level agreement on economic policies and reforms for the third Extended Fund Facility (EFF) review, under which Egypt could access about $820 million.

On March 29th, the IMF’s Executive Board concluded the first and second reviews EFF deal with Egypt and approved an augmentation of the original loan program by $5 billion, as per the report.

Earlier this year, the IMF and Egyptian authorities had reached a significant agreement aimed at bolstering the country's economic outlook, extending IMF support to Egypt from $3 billion to $8 billion.

On December 16th, 2022, the IMF approved the 46-month EFF arrangement for Egypt.