The International Monetary Fund approved a new 12-month $5.2 billion (Dh19bn) loan for Egypt to help it cope with challenges posed by the Covid-19 pandemic and finance its budget deficit and balance of payments shortfalls.
The approval of the Fund's Stand-By Agreement (SBA) allows for the immediate disbursement of about $2bn, which will help Egyptian authorities preserve the macroeconomic achievements made over the past four years. The arrangement will also support health and social spending to protect vulnerable groups, and advance a set of key structural reforms to put the country on a strong footing for a sustained recovery with higher and more inclusive growth and job creation over the medium term.
The authorities were looking to broaden and deepen structural reforms begun under the Extended Fund Facility, but the Covid-19 pandemic has temporarily refocused government priorities to address the economic and health crisis.
"Over the past few years, Egypt saw strong growth, falling unemployment, moderate inflation, build-up of strong reserve buffers, and significant reduction in public debt. The authorities were looking to broaden and deepen structural reforms begun under the Extended Fund Facility, but the Covid-19 pandemic has temporarily refocused government priorities to address the economic and health crisis,” Antoinette Sayeh, deputy managing director and acting chair of the IMF’s executive board, said in a statement on Friday.
“The government has responded decisively to the crisis with a comprehensive package that supports health care needs, the economy, and the most affected individuals and sectors. The Central Bank of Egypt has also taken several actions to support economic activity and borrowers.”
Egypt's economic policy framework, supported by the new IMF arrangement, aims to maintain the country's macroeconomic stability with priorities to protect necessary social and health spending. It also aims to avoid an excessive build-up of public debt, anchor inflation expectations and safeguard financial stability while maintaining a flexible exchange rate.
The initiative will also help implement key structural reforms to strengthen transparency, governance, and competition, according to the IMF.
After a strong track record of successfully completing a home-grown economic reform programme supported by the IMF’s Extended Fund Facility in 2016-2019, Egypt was one of the fastest growing emerging markets prior to the Covid-19 outbreak. However, the significant domestic and global disruptions caused by the pandemic have worsened the country's economic outlook and reshuffled policy priorities.
"As the economic recovery takes hold, fiscal policy will need to work towards resuming the downward trajectory of public debt. The Central Bank of Egypt aims to continue to provide a stable anchor for inflation expectation and financial stability while rebuilding reserve buffers and allowing orderly exchange rate adjustments," Ms Sayeh said.
"Achieving programme objectives is subject to risks. At the global level, uncertainty about the severity and length of the downturn remains exceptionally high. On the domestic side, the authorities will need to continue their strong track record of steadfast policy implementation."
The economies of the Middle East and Central Asian countries are projected to shrink by an average of 4.7 per cent, more than the earlier 2.8 per cent contraction forecast, according to the IMF.
Last week, Egypt significantly eased regulations against the spread of the coronavirus, cancelling the overnight lockdown, reopening mosques and churches and allowing patrons back into restaurants and cafes but with limited capacity. Cinemas and theatres can also reopen, but beaches and public parks will remain shut.
"Maintaining social cohesion during this crisis period will be paramount for the success of the programme. Enhanced communication and transparency around the policies and their implementation will be crucial to ensure broad support for the government’s reform efforts on behalf of the Egyptian people,” Ms Sayeh said.
Moody’s Investors Service last month affirmed Egypt’s B2 rating on the resilience of its credit profile after the IMF approved $2.77bn of emergency funding to help it cope with the fallout from the Covid-19 pandemic.
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
UAE currency: the story behind the money in your pockets
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
The specs
Engine: 3.0-litre 6-cyl turbo
Power: 435hp at 5,900rpm
Torque: 520Nm at 1,800-5,500rpm
Transmission: 9-speed auto
Price: from Dh498,542
On sale: now
Yuki Means Happiness
Alison Jean Lester
John Murray
Killing of Qassem Suleimani
THE LOWDOWN
Romeo Akbar Walter
Rating: 2/5 stars
Produced by: Dharma Productions, Azure Entertainment
Directed by: Robby Grewal
Cast: John Abraham, Mouni Roy, Jackie Shroff and Sikandar Kher
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
ZAYED SUSTAINABILITY PRIZE
The bio:
Favourite holiday destination: I really enjoyed Sri Lanka and Vietnam but my dream destination is the Maldives.
Favourite food: My mum’s Chinese cooking.
Favourite film: Robocop, followed by The Terminator.
Hobbies: Off-roading, scuba diving, playing squash and going to the gym.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
The specs: Rolls-Royce Cullinan
Price, base: Dh1 million (estimate)
Engine: 6.75-litre twin-turbo V12
Transmission: Eight-speed automatic
Power: 563hp @ 5,000rpm
Torque: 850Nm @ 1,600rpm
Fuel economy, combined: 15L / 100km
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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