Egypt’s fourth IMF review is set to wrap by tomorrow, with only procedural stages left before the Fund’s Executive Board formally greenlights the decision that will unlock USD 1.3 bn in financing, Prime Minister Moustafa Madbouly announced at his weekly presser yesterday. Madbouly pointed to significant progress made in many of the review’s targets and added that Fund Executive Director Kristalina Georgieva had spoken positively about actions taken by the country. We will be keeping an eye out for when Egypt next pops up on the board’s calendar for the review’s final thumbs up.

The IMF is striking a similar tone, stating that the two sides had made “substantial progress on policy discussions toward the completion of the fourth review” in a statement released yesterday announcing that the IMF’s mission to Egypt had come to an end. The Fund’s Egypt head Ivanna Hollar, however, suggested that there’s still a little way to go before the review can be concluded as “discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review.”

It looks we may be in line for more than just fresh funds, with the prime minister announcing that the IMF has amended some of the program’s conditions. Madbouly did not detail the agreed-upon amendments, but noted that “there is a complete understanding of the Fund’s mission regarding the requests of the Egyptian state” and that the changes could even be extended throughout the entire course of the program.

We’re still yet to find out what the amendments actually are, but Madboly alluded to ongoing negotiations with the Fund on “how we can postpone some of the targets so that we do not put pressure on the citizens in the coming period” in a previous presser.

The announcement follows news that the International Monetary Fund mission had concluded its two-week visit to Cairo and is expected to greenlight the fourth review of Egypt’s loan program with the Fund, three government sources told EnterpriseAM earlier in the day. The sources mirrored Madbouly’s comments and noted broad agreement that economic indicators are moving in the right direction, with structural reforms showing tangible progress despite a challenging external environment.

Thankfully, it seems that a fall in Suez Canal contributions were offset by gains elsewhere, as although the Suez Canal Authority’s contributions to the state coffers plummeted 92% y-o-y to EGP 1.0 bn in the first quarter of FY 2024-25, the shortfall was partially offset by a 108% surge in revenues from special funds and accounts bringing in EGP 4.4 bn, alongside higher contributions from state entities, according to one source. These gains — driven by the government’s new unified budget framework — helped push the Finance Ministry’s surplus to EGP 3.6 bn, up from EGP 2.6 bn during the same period last year, the sources said.

The sources noted a revenue surplus over four times higher than recorded in the same period last year, driven by spending realignments, improved inter-agency coordination, and better management of due payments. These measures bolstered revenue-generating government entities and cut deficits. The sources also noted that tax revenue has grown an unprecedented 45% to reach EGP 413 bn in the first quarter of FY 2024-25, compared to EGP 285 bn in the same period last year.

The sources noted a positive shift in public debt management strategy, including a greater reliance on self-generated resources from various entities, which was highlighted as a key strength in reports submitted to the IMF mission.

Regarding exchange rate flexibility, one source told EnterpriseAM that the IMF mission’s report noted the EGP had performed well throughout the past period.

The Fund made clear its priorities for the government going forwards, arguing that the “focus needs to remain on ensuring inflation is on a firm downward trend toward the medium-term target.” The IMF also pointed to the need for “continued fiscal discipline” to further reduce public debt vulnerabilities and mutually agreed upon priorities of increasing domestic revenues, reducing fiscal risks — particularly in the energy sector, and strengthening the social safety apparatus.

The international press also took note of the story: Reuters | Bloomberg.

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