Ahmed Kamel – Egypt Daily News
Cairo is moving forward with a series of economic reforms aimed at strengthening investor confidence and accelerating private-sector participation, as an International Monetary Fund mission arrived in the capital this week to conduct two delayed program reviews. The successful completion of these reviews could release approximately $2.5 billion in funding before the end of the year, providing a vital boost to Egypt’s recovery after two years of economic turbulence.
The IMF delegation, tasked with carrying out the fifth and sixth reviews of Egypt’s Extended Fund Facility (EFF), arrived on Monday for an 11-day visit. These reviews, long postponed due to concerns over the pace of structural reforms, will assess Egypt’s progress in liberalizing its exchange rate, curbing inflation, streamlining state spending, and expanding private-sector involvement. The reviews will determine disbursements of about $1.2 billion from the main EFF program and an additional $1.3 billion from the IMF’s Resilience and Sustainability Facility.
The mission coincides with a renewed government push to implement key reforms. On the eve of the IMF visit, Prime Minister Mostafa Madbouly chaired a high-level meeting with ministers of planning, finance, and investment, overseeing the finalization of an updated State Ownership Policy and the organizational structure of a newly created State-Owned Enterprises Restructuring Unit. These initiatives are central to Egypt’s commitment to reduce the state’s direct involvement in commercial activity, streamline the management of public assets, and expand private-sector participation.
The Restructuring Unit will serve as the central authority responsible for overseeing the privatization and financial restructuring of state-owned enterprises (SOEs), coordinating with relevant ministries to prepare assets for sale or potential public listings. According to Cabinet spokesperson Mohamed Al-Homsani, the unit aims to improve transparency, strengthen financial discipline, and maximize economic performance while maintaining state control over strategically important enterprises.
Prime Minister Madbouly emphasized that private-sector growth is essential for sustainable economic expansion, job creation, and improving competitiveness. He also stressed the importance of using objective indicators to evaluate the impact of privatization and other reforms, particularly for SOEs scheduled for near-term divestment or initial public offerings.
Recent macroeconomic indicators offer cautious optimism. Inflation, which peaked at around 38 percent in late 2023, has slowed to 12.5 percent as of October, despite a modest uptick from September. The Suez Canal, a critical source of foreign currency, is showing signs of recovery after revenue declines caused by repeated Houthi attacks on Red Sea shipping between 2023 and 2025. Canal revenues rose 14.2 percent year-on-year between July and October, with global shipping companies, including Maersk, signaling a willingness to resume transit once security conditions improve.
Fiscal pressures remain a challenge. Egypt’s budget deficit widened to 3.2 percent of GDP in the first four months of the 2025-2026 financial year, driven by a 54 percent increase in interest payments to 0.9 trillion Egyptian pounds ($21 billion). Interest payments now consume around 60 percent of government expenditure. Nonetheless, a stronger primary surplus and rising tax revenues provide some relief, with analysts expecting further improvement as the government receives additional foreign currency inflows, including a $3.5 billion land sale payment from Qatar.
Tourism and foreign investment continue to underpin the recovery. Visitor arrivals reached 15.6 million between January and October, a 21 percent increase year-on-year, supported by the recent opening of the Grand Egyptian Museum. Egypt has also attracted record Gulf investment, including a $29.7 billion agreement with Qatar’s Qatari Diar to develop a high-end coastal city along the Mediterranean.
The IMF visit represents a crucial test of Egypt’s reform agenda and its capacity to navigate a heavy debt burden while sustaining signs of economic stabilization. Successful reviews and the release of $2.5 billion in funding would strengthen reserves, signal renewed confidence from international lenders, and reinforce the momentum of Cairo’s economic rebound as the country enters 2026.
