Egypt Rules out IMF Loan Deal before Presidential Polls

By Yomna Yasser On Mar 30, 2014

Egypt has ruled out on Sunday seeking a $4.8 billion loan agreement from the fund in the meantime, according to finance minister Hany Qadry.

Qadry elaborated that Egypt needs first to elect its head of state and form its parliament before seeking a loan deal with the International Monetary Fund (IMF), he noted.

“Any talk of a deal with IMF is premature.” The minister noted

Two years of negotiations over a $4.8 billion loan have passed without an agreement between the two sides, mainly because of the reluctance of successive Egyptian governments to impose reforms that would squeeze living standards, such as lifting fuel subsidies and raising taxes.

Since Mohamed Morsi was ousted in July, Egypt has turned increasingly to friendly Arab states for economic assistance, receiving pledges of $12 billion in loans, grants and fuel shipments from Saudi Arabia, the United Arab Emirates and Kuwait, of which $7 billion has been delivered.

Qadry worked as a top ministry official for more than five years until he resigned 10 months ago during the term of deposed President Mohamed Morsi.

Educated at Columbia University, he was described by a senior European diplomat as the only ministry expert able to deal professionally with the International Monetary Fund during a failed Morsi administration bid to secure a loan last year.

Dimian stepped down shortly after the talks collapsed because of Egyptian resistance to economic reforms. Those reforms are needed to control a budget deficit that hit almost 14 percent of gross domestic product in the year ending June 30.

Dimian was appointed as deputy finance minister in 2007, serving under then Finance Minister Youssef Boutros-Ghali. He was promoted during Morsi’s year in power to first deputy minister in 2012.

Dimian has replaced former Finance Minister Ahmed Galal.

During his six years at the Finance Ministry, Dimian established a Macro-Fiscal Policy Unit, promoted fiscal transparency and drafted a modern income tax code, he said on his Linkedin profile.