Ziad Bahaa Al-Din, a prominent Egyptian economist and former deputy prime minister, has stated that the Egyptian government has not yet reached a final agreement with the International Monetary Fund (IMF) regarding the fifth review of Egypt’s economic reform program, scheduled by the end of the current autumn. He emphasized that both parties have agreed to link the completion of the fifth review with the sixth, which is set for the end of 2025. n nIn an interview with Al-Araby Al-Jadeed, Bahaa Al-Din highlighted ongoing disagreements between the IMF and Cairo over the government’s commitment to its public asset divestment plan. He pointed out that despite repeated announcements, the state has not moved forward with selling stakes in companies affiliated with the military and sovereign entities—steps critical to expanding private sector participation and fostering economic growth. n nHis remarks came during an event hosted by the Economic Editors Division at the Journalists Syndicate, attended by syndicate head Khaled El-Balshi and several economic reporters. This follows official statements claiming that the IMF board had approved the completion of both the fifth and sixth reviews last month, with the Ministry of Finance expected to disburse $1.7 billion in loan tranches from an $8 billion facility. However, the government has not provided updates on the delayed $1.3 billion Sustainability Loan promised earlier this year. n nPrime Minister Mostafa Madbouly recently expressed optimism about ongoing cooperation with the IMF, announcing that an IMF mission would soon visit Cairo for the periodic review. He attributed delays in launching public offerings to exceptional regional conditions over the past two years, pledging that the government would soon resume the privatization agenda. n nRegarding Madbouly’s suggestion that Egypt’s IMF program could conclude by 2027, Bahaa Al-Din clarified that this does not rule out future collaboration. He cautioned against public perceptions that the IMF directly causes price hikes in fuel, electricity, and basic goods. In reality, such adjustments stem from mutual understandings focused on fiscal discipline, subsidy rationalization, budget consolidation, revenue enhancement, and inflation and debt reduction—both domestic and external. n nA seasoned figure in Egypt’s economic policymaking, Bahaa Al-Din held key roles between 2004 and 2013, including heading the Financial Regulatory Authority and the General Authority for Investment, and serving as Minister of International Cooperation and Deputy Prime Minister for Economic Affairs. He was directly involved in past negotiations with the IMF. n nHe stressed the need for the government to define its post-IMF reform strategy: whether it will pursue an independent national economic plan or backtrack on hard-won gains achieved through stringent policies. Those measures, though costly to citizens in terms of currency depreciation, reduced purchasing power, and soaring prices, helped stabilize the pound, curb inflation, and gradually lower interest rates—preventing a full collapse of the currency. n nBahaa Al-Din noted that IMF engagement is not a sign of weakness. Given Egypt’s standing and voting power within the institution, representing itself and nine other countries on the Executive Board, cooperation enhances credibility. While the IMF does not prioritize social sectors like education or poverty reduction, its endorsement improves credit ratings, facilitates cheaper borrowing, and attracts investment—key for macroeconomic and exchange rate stability. n nHe warned against oscillating between reform programs without completing ongoing efforts, especially after citizens have borne significant costs. “We must not return to old patterns after paying such a high price,” he said. “The government must take responsibility for economic shocks and avoid repeating the same path.” n nOn privatization, he argued that selling state assets should aim to broaden ownership and empower the private sector. However, he criticized the government’s approach as transactional—focused solely on immediate revenue—rather than strategic. Alternative models could incentivize long-term investment, boost production capacity, create jobs, and attract serious investors with capital and expertise. n nAn IMF mission visiting Cairo in early October set two benchmarks for restoring confidence: maintaining genuine exchange rate stability driven by market forces rather than central bank intervention, and increasing proceeds from public offerings. So far, Egypt has raised $3.5 billion in the 2024–2025 fiscal year, falling short of the targeted $6 billion—less than 50% of the annual goal. n nIMF officials believe Egypt is nearing completion of the fifth and sixth program phases by end-2025, though financial and social challenges remain. A delicate balance is needed between fiscal discipline and social protection, alongside continued debt restructuring, financial reforms, and privatization—factors the IMF is closely monitoring ahead of the next reviews. Experts warn that failure to meet these conditions could delay the $1.7 billion disbursement, pushing the decision to the IMF’s February 2026 board meeting, with funds potentially released by March 2026. n— news from alaraby.co.ukn
— News Original —nEgyptian Economic Expert: Government Has Not Reached Final Agreement with IMFn nZiad Bahaa Al-Din, the Egyptian economic expert and former deputy prime minister, revealed that the government has not reached a final agreement with the International Monetary Fund (IMF) regarding the fifth review of the Egyptian economic reform program, scheduled by the end of the current autumn. He confirmed that there is an understanding to link the completion of the fifth review with the sixth review, scheduled for the end of 2025. n nBahaa Al-Din said, in statements to Al-Araby Al-Jadeed, that there are deep disagreements still existing between the Fund’s management and the government over its commitment to the program of exiting public assets and the extent of its commitment to implementing the offering program it pledged over the past four years, particularly regarding the sale of assets of companies affiliated with the military and sovereign bodies, which the government has not yet resolved, despite repeated talk of offering them to major investors or on the stock exchange, hindering the private sector’s ability to grow satisfactorily. n nBahaa Al-Din made these remarks on the sidelines of an event organized by the Economic Editors Division at the Journalists Syndicate last Wednesday, attended by syndicate head Khaled El-Balshi and Egyptian economic editors, following government statements confirming the IMF board, which met last month, approved completing the fifth and sixth reviews, and the Ministry of Finance awaits the release of $1.7 billion in scheduled installments from a total loan of $8 billion. The government has ignored providing any information about Egypt receiving the sustainability loan the Fund promised Egypt at the beginning of this year, which has been postponed several times, worth $1.3 billion. n nIt is also worth noting that Egyptian Prime Minister Mostafa Madbouly said in a press conference on Saturday that there is positive alignment with the IMF regarding the ongoing cooperation program, indicating that the arrival date of the Fund’s mission to Cairo for the periodic review will be announced in a few days. Madbouly also pointed out that the government’s slow start in the government offering program is due to the exceptional conditions the region has experienced over the past two years, adding that the government will soon begin implementing the program. n nRegarding Madbouly’s statement about the approaching end of Egypt’s programs with the IMF by 2027, Bahaa Al-Din considered that this statement does not mean the government will not renew cooperation with the Fund in any future projects, clarifying that such statements suggest to the public that the Fund is responsible for raising prices of goods and services, especially fuel, electricity, and basic commodities, to citizens, while the reality confirms that these increases do not come by IMF decision but through understandings between the government and the Fund on rationalizing government expenditures, especially commodity subsidies, balancing the general budget, increasing public revenues, and reducing inflation and domestic and foreign borrowing rates. n nZiad Bahaa Al-Din is considered one of the well-known references in studying the Egyptian economy through his experience dealing with the Fund and within the Egyptian government. Bahaa Al-Din held several positions within the government apparatus between 2004 and 2013, heading the Financial Regulatory Authority, the General Authority for Investment, and serving as Minister of International Cooperation and Deputy Prime Minister for Economic Affairs, engaging at that time in Cairo’s discussions with the IMF. n nBahaa Al-Din also pointed out the necessity for the government to determine what the next step is to continue economic reform plans in the post-IMF agreement phase, and whether it has another national program capable of telling the Fund ‘thank you for what has been implemented, and we will start a new journey independently,’ or whether it will retreat from the results achieved through policies that imposed harsh conditions, burdening citizens and institutions with immense pressures, manifested in currency depreciation, purchasing power decline, sharp price increases, resorting to loans and selling important assets, enabling control over inflation rates, gradually lowering interest rates, preventing the complete collapse of the pound, and moving toward relative exchange rate stability. n nBahaa Al-Din believes that cooperation with the IMF is not a shame, as Egypt, ‘with its status and financial share within the Fund, plays its role in serving its economy and nine other countries it represents on the Board of Directors,’ noting that despite the Fund’s lack of interest in education, health development plans, and poverty reduction, the certificate it issues about a country’s economic condition makes it, in the view of financial institutions and other countries, capable of meeting its financial obligations, improving its credit rating, enabling investment attraction and obtaining loans at the lowest cost, ensuring macroeconomic stability and the exchange market. n nHe also warned against Egypt swinging between economic reform programs, leading to failure to complete what has already been started, after the state paid a heavy price, at the expense of ‘citizens’ pockets,’ saying: ‘We do not want to return to old steps aimed at reform we paid for at a harsh price, nor do we want to go backward; the government is responsible for the economic shocks that occurred, and we must not return to the same path because what we paid came at a high cost.’ n nBahaa Al-Din clarified that selling public assets to expand the ownership base and bring in the private sector are important issues that can lead to economic improvement, stressing that the government adopted the worst practices in sales procedures, resorting to selling assets in exchange for money, while there are other types of sales that encourage investors to invest more and increase business capacity, contributing to increased production and generating new job opportunities, expanding ownership base for the people and attracting serious investors with funds and expertise supporting the country’s economy. n nPreviously, an IMF mission that visited Cairo in early October set two criteria for renewing confidence in the government’s ability to fulfill its commitments to the Fund: maintaining real exchange rate stability without unilateral direction from the Central Bank, subject to supply and demand, and increasing public offering proceeds in the coming months, which did not exceed 50% of the agreed rate in 2025. Government proceeds from public offerings reached $3.5 billion in the fiscal year 2024–2025, below the expected $6 billion for this year. n nIMF officials also see that Cairo is approaching completion of the fifth and sixth stages of its program with the Fund before the end of 2025, though the path remains fraught with financial and social challenges requiring a delicate balance between fiscal discipline and social protection, and continued financial reforms, debt restructuring, and government offerings—an equation the Fund is closely watching before completing the next two program reviews. Experts indicate that the government’s failure to comply with these conditions will lead to delaying the agreement on the fifth and sixth stages to the Fund’s Board meetings in February next year, to disburse entitlements reaching $1.7 billion by the end of March 2026.