Egypt’s Next IMF Deal May Be Focused on Slashing Red Tape

(Bloomberg) -- Egypt is in talks with the International Monetary Fund over a non-financial structural reform program, the central bank governor said, as the Middle East’s fastest-growing economy targets a surge in foreign investment.

“Now that the fiscal and the monetary reform has been done, we’re talking about structural reforms,” Tarek Amer said Tuesday at an energy conference in Cairo. That step would mean “trying to overcome the bureaucracy, which we do have and many other countries have, and which we want really to abolish over time.”

The Arab world’s most populous country completed a three-year agreement with the IMF in 2019 that involved a $12 billion loan and sweeping economic steps, including a dramatic currency devaluation and subsidy cuts. Now it’s on a mission to attract foreign capital beyond Egyptian debt and the oil and gas industry, even making the landmark suggestion that some military-held companies could be sold off.

Egypt ranks in 114th place on the World Bank’s ease of doing business index.

Amer said Tuesday that the central bank had “opened all channels” for the flow of capital so investors “don’t have borders like before.” The institution has also given them a stable foreign-exchange market “that they can read” and in which “the risk premium is not too high like before.”

As for the IMF, “we are still in discussions with them,” Amer said, without specifying when any new agreement may be reached. “They understand us and they understand what we have got.”

To contact the reporters on this story: Mirette Magdy in Cairo at mmagdy1@bloomberg.net;Salma El Wardany in Cairo at selwardany@bloomberg.net

To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, Michael Gunn, Paul Abelsky

©2020 Bloomberg L.P.