Egypt to receive first $1 billion of a $3 billion loan from World Bank

Egypt is expected to receive the first $1 billion tranche of a $3 billion loan from the World Bank after approvals from the country’s parliament in April.

World Bank set 2provide #Egypt with first $1Bln of $3Bln loan pending economic reforms incl VAT#CapitalismEnslaveshttps://t.co/gXYfIjjQjE

— Khilafah.com (@KhilafaRashida) April 13, 2016

The international lender had said it would provide the first tranche in December but is waiting for the Egyptian government’s economic programme to be passed by parliament.

While speaking at a news conference, World Bank vice president Hafez Ghanem said that there would not be specific conditions placed on future tranches but highlighted certain changes the lender would like to see, such as a shift in food subsidy policy away from reduced prices to direct cash transfers for the poor.

Egypt has delayed various reforms ranging from raising VAT that is likely to increase government revenues and a new civil service law that will trim the country’s public sector workers to an ambitious plan to wean the country off costly energy subsidies that has since been scaled back.

So far, Egypt has received billions of dollars, including grants from gulf oil producers such as Saudi Arabia.

But Egypt has said it would rely less on grants from its neighbours moving forward and would focus instead on attracting foreign investment that could relaunch its dollar starved economy.

Last week it signed an agreement with Saudi Arabia to set up a 60 billion Saudi riyal ($16 billion) investment fund among other investment agreements including an economic free-zone to develop Egypt’s Sinai region.

The north African economy is yet to recover from the 2011 uprising.

Reuters