Egypt Daily News – The International Monetary Fund (IMF) has recently made a significant decision to reduce lending fees for its member countries, a move that is projected to save Egypt approximately $370 million over the next five years.
This fee reduction is part of a broader initiative that will also benefit other significant borrowers from the IMF: Argentina is expected to save $4.6 billion, Ecuador $584 million, Ukraine $348 million, and Angola $160 million.
Kristalina Georgieva, the Managing Director of the IMF, highlighted that the fund’s measures would reduce borrowing costs for its members by around 36%, translating to savings of approximately $1.2 billion annually.
Mohamed Fouad, an economic expert, elaborated that the changes would lower Egypt’s annual loan fees by about 1%, given that Egypt’s annual payments to the fund total $6 billion.
The IMF’s decision follows its approval of an increased loan program for Egypt, which now stands at $8 billion, following an original agreement for $3 billion in a 46-month extended facility established in December 2022. Following this, the fund disbursed an $820 million tranche of support, after completing the first two reviews of Egypt’s support program.
However, the completion of the fourth review, which would unlock a further $1.3 billion tranche, has been postponed by the IMF until after its annual meetings, with assurances that it will occur in the coming months.
Georgieva also noted that the number of countries facing additional fees is expected to decrease from 20 to 13 by the fiscal year 2026, with the new measures set to take effect in November. This review of the fee policy is the first since 2016, prompted by rising global interest rates that have increased borrowing costs.
Despite the positive changes, there remains criticism from academics, non-profit organizations, and economists who advocate for the complete abolition of these additional fees, arguing that they impose further burdens on countries already facing severe economic challenges.
