The government may modify its programme that was previously submitted to the parliament in order to match the International Monetary Fund’s (IMF) negotiation requirements, according to Ashraf El-Araby, member of the Economic Committee in the House of Representatives and former adviser to the IMF. The parliament will then vote again to approve it.
El-Araby added that the step of borrowing from the IMF is good, but late, adding that the government should pen a balanced reform programme to achieve its goals.
According to a cabinet statement on Tuesday, the government is negotiating with the IMF to support its economic reform programme, which is based on imposing the value-added tax and adopting the civil service act to fix the administrative apparatus of the state, as well as working to increase exports and regulate random imports to ease the pressure on the balance of payment deficits.
In addition, the government aims to put shares of state-owned companies and banks on the Egypt Exchange to broaden the shareholders base, increase the depth of the capital market, and raise the market capitalisation. This will attract indirect investment valued at $10bn over three years, according to Minister of Investment Dalia Khorshid.
El-Araby said that the IMF will ask the government to take on structural reforms next to the general budget and the exchange rate. Furthermore, it will call for a mechanism to include the informal economy into the formal economy, so as to ensure fair collection of tax.
He added that talks with the IMF will take between three and four months.