The World Bank is expected to lend $1 billion to Egypt after approval in December, to revive the economy which has been battered by political chaos since the 2011 uprising and to ease a dollar shortage that has hindered importation.
According to Egypt’s International Cooperation Minister Sahar Nasr, this will be effected once outstanding paper work is finalized.
The funds will be received in tranches over a period of 3 years. The first $1billion was approved in December, which is part of a $3 billion dollar loan from the lender.
However, the media in the country has raised questions whether the money would come as the programme is linked to the government’s economic reform programme, including plans for value-added tax (VAT).
The country’s new parliament has ratified a majority of economic laws passed by presidential decree during the three years in which Egypt did not have a legislative house. But it has yet to ratify the government’s economic plan or the World Bank loan itself.
“We are just working on submitting the required documentation. It is nothing. We are normal. There is nothing (to say) about it,” Nasr said.
She also added that the country has also received $500 million loan for budget support from the African Development Bank, which is part of a $1.5 billion three-year programme also signed in December.
Egypt also aims to secure more aid from Saudi Arabia. Nasr said the government was still negotiating the details of a Saudi pledge to provide Egypt with petroleum aid over five years.
Egypt signed an initial three-month deal with Riyadh to meet immediate needs while talks were ongoing.
The north African country spends roughly $700 million a month on petroleum product imports.While it has benefited from plummeting global oil prices, a forex shortage has made it harder for import-reliant Egypt to finance shipments.
In January, the World Bank lowered its expectation for economic growth rate for the fiscal year 2015/2016 by 0.7 per cent.
The lender cited the implications of the Russian jetliner’s crash for the tourism industry and foreign currency shortage.
Nonetheless, Egypt has secured multi-billion-dollar aid commitments both from China and Saudi Arabia and signed major investment deals with Russia.