CAIRO: The International Monetary Fund said it had reached a staff-level agreement with Egypt for a $12 billion three-year funding facility to support a government reform program aimed at plugging a funding gap and rebalancing the currency market.
The deal is subject to approval by the IMF executive committee which is expected to consider Egypt’s request for an Extended Fund Facility (EFF) in the coming weeks.
“Egypt is a strong country with great potential but it has some problems that need to be fixed urgently. The EFF supports the authorities’ comprehensive economic reform program as... approved by the parliament,” Chris Jarvis, the head of the IMF mission in Cairo, said in a statement.
“The program aims to improve the functioning of the foreign exchange markets, bring down the budget deficit and government debt, and to raise growth and create jobs...”
Egypt’s dollar-denominated 2025 bond rose to trade at its highest level since end-Sept 2015 after the IMF deal was announced.
Egypt announced on July 26 it was close to agreeing an IMF lending program worth $12 billion to ease its deficit and restore market stability. Prime Minister Sherif Ismail asked his team to complete talks during a two-week visit by an IMF staff team that arrived in Cairo on July 30.
Thursday’s announcement was the first IMF confirmation of the duration and size of Egypt’s potential funding facility.
Egypt’s economy has been struggling since a mass uprising in 2011 ushered in political instability that drove away tourists and foreign investors, both major earners of foreign currency. Foreign reserves have halved to about $15.5 billion since then.
The dollar shortage has forced Egypt to introduce capital controls that have hit trade and growth, while downward pressure on the pound has mounted on speculation that the central bank will need to devalue for the second time this year.
Speaking at a news conference, Jarvis said the aim of the foreign exchange policy was to end hard currency shortages.
“Moving to a flexible exchange rate regime will strengthen competitiveness, support exports and tourism and attract foreign direct investment. This would foster growth and jobs and reduce financing needs,” Jarvis said in his statement. He did not say if Egypt had committed to easing its exchange rate policy as part of the deal.
The government has already begun implementing its reform program, including plans for a value added tax (VAT) and subsidy cuts. It announced electricity price hikes this week.
Jarvis said the government recognized the need for “quick implementation of economic reforms for Egypt to restore macroeconomic stability and to support strong, sustainable, job-rich growth.”
IMF agrees $12 billion 3-year funding deal with Egypt
IMF agrees $12 billion 3-year funding deal with Egypt
Saudi Arabia’s cultural sector is a new economic engine between Riyadh and Paris, says ambassador
RIYADH: Culture has become a fundamental pillar in bilateral relations between France and Saudi Arabia, according to the French Ambassador to the Kingdom, Patrick Maisonnave.
Maisonnave noted its connection to the entertainment and tourism sectors, which makes it a new engine for economic cooperation between Riyadh and Paris.
He told Al-Eqtisadiah during the opening ceremony of La Fabrique in the Jax district of Diriyah that cultural cooperation with Saudi Arabia is an important element for its attractiveness in the coming decades.
La Fabrique is a space dedicated to artistic creativity and cultural exchange, launched as part of a partnership between the Riyadh Art program and the French Institute in Riyadh.
Running from Jan. 22 until Feb 14, the initiative will provide an open workspace that allows artists to develop and work on their ideas within a collaborative framework.
Launching La Fabrique as a space dedicated to artistic creativity
The ambassador highlighted that the transformation journey in the Kingdom under Vision 2030 has contributed to the emergence of a new generation of young artists and creators, alongside a growing desire in Saudi society to connect with culture and to embrace what is happening globally.
He affirmed that the relationship between the two countries is “profound, even cultural par excellence,” with interest from the Saudi side in French culture, matched by increasing interest from the French public and cultural institutions unfolding in the Kingdom.
Latest estimates indicate that the culture-based economy represents about 2.3 percent of France’s gross domestic product, equivalent to more than 90 billion euros ($106.4 billion) in annual revenues, according to government data. The sector directly employs more than 600,000 people, making it one of the largest job-creating sectors in the fields of creativity, publishing, cinema, and visual arts.
Saudi Arabia benefiting from French experience in the cultural field
Maisonnave explained that France possesses established cultural institutions, while Saudi Arabia is building a strong cultural sector, which opens the door for cooperation opportunities.
This comes as an extension of the signing of 10 major cultural agreements a year ago between French and Saudi institutions, aiming to enhance cooperation and transfer French expertise and knowledge to contribute to the development of the cultural system in the Kingdom.
He added that experiences like La Fabrique provide an opportunity to meet the new generation of Saudi creators, who have expressed interest in connecting with French institutions and artists in Paris and France.
La Fabrique encompasses a space for multiple contemporary artistic practices, including performance arts, digital and interactive arts, photography, music, and cinema, while providing the public with an opportunity to witness the stages of producing artistic works and interact with the creative process.
