Egyptian officials, trying to allay investor concerns, pledged to honor agreements and said the economy is picking up as they voiced hopes of soon concluding a $4.8 billion loan accord with the International Monetary Fund.
Prime Minister Hisham Qandil said Egypt wants to become a mecca for investments and officials are determined to boost confidence to revive an economy battered by last year’s unrest that ousted President Hosni Mubarak. The uprising ravaged Egypt’s economy as near-daily strikes undercut productivity and investors withdrew funds, leaving the government with sluggish growth and a forced reliance on local debt markets.
Qandil also sought to allay domestic concerns about the IMF loan, saying at a Cairo conference today there are “no conditionalities, no devaluations of the pound” attached to the plan and that talks are focused on reaching a deal that has broad popular backing. Egyptian officials will attend a joint IMF-World Bank meeting in Tokyo this week and an IMF delegation has been invited to visit Cairo by the end of October.
If “these discussions are concluded by then, an internal process inside the IMF has to take its course for another month or two,” Qandil said. “Then a deal will be concluded.”
Egypt needs foreign investors because it can’t cover its 135 billion-pound ($22 billion) budget deficit solely by relying on the local market, Finance Minister Momtaz el-Saieed said at the conference. International reserves have plunged to $15 billion, less than half their levels before the uprising.
Egypt has an “aggressive” plan to attract investment from the private sector and create jobs, Investment Minister Osama Saleh said. These include three “mega-national” projects including one involving mainly small and medium-sized enterprises and the East Port Said integrated development project, he said.
Resolving investor disputes and amending the labor law are also priorities, Saleh said, adding that “the biggest challenge to foreign investment is the labor issue.”
He also said Egypt would be unable to cut unemployment from current levels of more than 12 percent until economic growth reached 7.5 percent, which the government is targeting in the coming years.