IMF delegation to arrive in Cairo this month following subsidy, FDI, privatization progress

A mission from the International Monetary Fund (IMF) is expected to touch down in Cairo in the second half of the month to discuss — and hopefully greenlight — the combined fifth and sixth reviews of our USD 8 bn Extended Fund Facility program, an informed source told EnterpriseAM. The visit follows improvements in key economic indicators the fund had been looking for progress on, we were told.

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What progress? Qatar’s recently-announced USD 29.7 bn Alam El Roum project, for one. The multi-bn foreign direct investment has helped ease the IMF’s concern about FX inflows, with USD 3.5 bn on its way to state coffers. This comes in addition to a whole lot of funding for private and public sector players to implement the project, with the New Urban Communities Authority set to receive 15% of revenues.

A decent chunk — USD 350 mn — will go toward reducing public debt — another key priority for the IMF. The funds will help the Finance Ministry support its longer-term plan of reducing public debt to 70% of GDP by 2030 through resource mobilization, public spending discipline, and diversifying government debt instruments — more on this later with the ministry’s medium-term strategy for public debt due for release in December.

Also persuading the IMF to give our reform progress a second look are recent fuelsubsidy cuts, which made decent progress in bringing domestic prices in line with the international energy market, our source added. The move is a clear sign of the state’s commitment to keeping to the IMF’s subsidy targets — and the fund, we’re told, has taken note.

Egypt can also point to progress in its privatization push — understood to be the IMF’s main priority. The fund has been told of Egypt’s recent move to expand its offering program and attract more investment, the source told us, likely referring to the move to include 50 state-owned companies in the privatization program, up from the 35 currently in focus, which two government sources told EnterpriseAM about late last month.

The government aims to raise USD 1.5-2 bn from the planned offerings before the end of 2025, the source said, starting with offering the Gebal El Zeit wind farm this month, either through the EGX or through a competitive tender, depending on which option proves more beneficial.

The beginning of recovery of activity in the Suez Canal is likewise helping our case, the source notes. In case you missed it, a total of 229 ships journeyed through the Suez Canal in October — marking the highest monthly rate of traffic since ships began diverting away from the strait in late 2023. Larger ships are also returning, including the CGM Benjamin Franklin, which this week became the largest container ship to pass through the canal in two years, signaling a gradual return of mega-vessels to the Red Sea route.