By Hend Kortam, Aswat Masriya
The World Bank will grant Egypt a loan worth $3 billion over three years to support the Egyptian state’s general budget, Egypt’s finance minister said on Wednesday.
Minister Hany Kadry Dimian announced news of the loan to reporters at an economic conference aired live on state television but did not provide details on the sectors in which the loan will be used and the time frame of the disbursments.
Typically, the World Bank offers loans for specific projects in specific sectors, rather than ones to support the general budget. In Egypt, for instance, the bank says it has a portfolio that includes “26 projects for a total commitment of US $5.92 billion” in sectors like energy, agriculture and education, among others.
The loan comes at a time when the Egyptian government is scrambling to collect money before the end of the year. Dimian told reporters the government is “open to all options to finance the budget and fill the funding gap in any way, but in the appropriate time and amount.”
Prime Minister Sherif Ismail told Reuters in an interview earlier this week that Egypt is low on dollars and aims to collect $4 billion before yearend by taking out a loan worth $1.5 billion from the World Bank and the African Development Bank.
Ismail added that Egypt would also offer land for sale to Egyptians abroad worth $2.5 billion.
Years of political turmoil have taken a toll on Egypt’s economy, halving the state’s foreign reserves and driving away tourists.
Amid the continued pressures on foreign reserves, Egypt has had to depreciate its currency twice this year and investment banks expect further devaluing before the end of 2015.
In response to a question on the possibility of taking out a loan from the International Monetary Fund (IMF), Dimian said the government has no “sensitivities” in dealing with the IMF.
An IMF delegation visited Egypt on a five-day trip last month to evaluate economic performance. In conclusion of the visit, the delegation praised the government’s economic plan.
Dimian’s announcement of the loan, comes just days ahead of the start of voting to elect members of Egypt’s House of Representatives. It remains unclear whether it will be possible for the legislature to discuss and approve the terms of this loan or if the loan will have been finalised before the parliament is in session possibly in December.
Since becoming president in June 2014, President Abdel Fattah has held legislative power, in absence of a House of Representatives.