Egypt’s President Abdel Fattah Al-Sisi has vowed to reduce the military’s undue influence over the country’s economy as part of a new $3 billion International Monetary Fund (IMF) bailout. The package of measures that will be introduced will address Cairo’s economic woes including a foreign currency crisis, a weakening pound and rising inflation.
A recent report on Cairo’s economic crises under Sisi shows that Egypt’s foreign debt has risen to $157.8bn, and foreign exchange reserves declined to $33.141bn as of August 2022. The total public debt during the Sisi era stands at 130 per cent of GDP.
Details of a statement issued by the IMF yesterday, reported the Financial Times, said that Egypt had agreed to “critical” structural reforms that included “levelling the playing field between the public and private sector” as part of a state-ownership policy endorsed by Sisi. The fund said that the policy would cover all state-owned enterprises, including “military-owned companies”, in what is said to be a rare acknowledgment of how the army has expanded its footprint across Egypt’s economy since the former general and defence minister seized power in a 2013 coup.
The Egyptian state will withdraw from sectors that are classified as “non-strategic”, including through the sale of assets. A pledge has been made by the regime to submit accounts to the finance ministry on a twice-yearly basis and provide information on any “quasi-fiscal” activities in an effort to improve transparency. The ministry has also pledged to ensure open access to the data, the IMF is reported as saying.
The Egyptian regime faces regular criticism over its failure to curb the military and state officials from scaring away investors and crowding out the public sector. The army, the country’s most powerful institution, is exempted from some taxes and its businesses are said to be notoriously opaque.
