Egypt hopes to agree on a new IMF funding package by the end of March and is on track to implement the structural reforms still needed to attract foreign investment, its minister of finance Mohamed Maait told GlobalMarkets on Saturday.
Egypt has told the Fund it would like to continue a programme of engagement during informal talks with the IMF after its $12bn three year extended fund facility ends in November, Maait said. “We have already started talking with the IMF about a future engagement and we have been in informal discussion about what will be the coming engagement, and we have put a target to finish this discussion by end of March,” he said.
The country has made remarkable progress under the IMF’s extended fund facility. Egyptian growth is on track for 5.9% this year, the fastest in the region, and it is now running a primary surplus of 2% of GDP, from a deficit of nearly 11% just three years ago.
Investors have heralded the success of Egypt’s reform programme but are keen to see progress continue. Incoming IMF head Kristalina Georgieva urged Egypt yesterday to reduce red tape in the private sector to encourage investment.
Maait said he remained committed to implementing structural reforms. “We know we have to take a lot of steps to open the door to more private sector participation in our economy and attract new foreign investment,” he said.
Recent measures taken last week include launching a website through which investors can directly purchase industrial land, reducing the cost of energy for certain industries, freezing the cost of electricity, and working on a system to automate trade procedures to reduce the time and cost, according to Maait.
“We aim to complete five to six IPOs by June 30 next year from different sectors,” he said. “Two are ready to go. The listings will be domestic, but we would love to see foreign investors coming in.”
The IMF completed the fifth review of its current extended fund facility earlier this month.
Progress has also been made in opening up Egypt’s capital markets to foreign investors. Egypt is working with Euroclear to enable its debt to be cleared outside of the country which would bring in more international investors and lower the cost of its local currency debt.
The term sheet signed with Euroclear outlines its plan for new issuance, bringing the sovereign a step closer to the launch which should happen at the end of 2020, sources said. Local Egyptian bonds have been among one of the best performing emerging market assets this year.