IMF mission chief for Egypt Ivanna Hollar says cabinet has pledged to slow spending on infrastructure as part of a package to bring more discipline to how we manage fiscal policy.

Cabinet agreed with the IMF to implement structural reforms that would also include “a new framework to slow down infrastructure spending, including projects that have so far operated outside regular budget oversight,” Hollar explained.

A hard ceiling on public investment: The government will introduce a ceiling on public investment for FY 2024-25, where the total of all public investment spending — that includes all ministries, economic bodies, the Public Enterprise Ministry’s companies, and state-owned companies — will not exceed GP 1 tn, according to Madbouly.

Putting words into action: A committee will be formed to oversee that the government abides by this decision to allow the private sector to lead the country’s economic growth. “The goal for the state is that the private sector should be the largest contributor to the total investments,” Madbouly said.

Promises of fiscal prudence: “The authorities agreed to maintain fiscal prudence over the medium-term and step-up efforts to mobilize additional domestic revenues, including through the rationalization of tax exemptions as well as to use a substantial part of divestiture proceeds to reduce debt,” Hollar said.

Could we get a bit more breathing room?Payments owed to the IMF under maturing facilities could, under certain conditions, be rescheduled in a bid not to put undue pressure on the EGP, two government sources told Enterprise.

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