The Arab world’s most populous country has concluded a preliminary deal with the International Monetary Fund (IMF) to receive $12 billion in loans over a three-year period.
The loan is intended to help repair Egypt’s faltering economy, which has stalled significantly since the ousting of the autocratic Hosni Mubarak in 2011. Political instability has increased inflation, reduced foreign investment, and hurt tourism in Egypt, a situation that neither the political elite nor the average Egyptian wishes to see prolonged.
The IMF said the loan, which must be approved by its executive board, is contingent on a government reform program that seeks to diminish the demand for black market dollar trading, reduce the budget deficit and government debt, and raise growth in order to create jobs.
Egypt’s current president, Abdel Fattah el-Sisi, removed then-president Muhammad Morsi in a coup-d’état in 2013. The Islamist Morsi, while democratically elected, had increasingly destabilized the country through unpredictable and autocratic behavior.
El-Sisi, who was and remains head of the Egyptian military, is seen by many to provide the firmness needed in the volatile Middle East/North Africa region. Yet extensive sacrifices have been made in the name of security, and economics problems have continually mounted since 2011.
The IMF loan would not be the first instance of Egypt receiving international aid. Between 2011 and 2013, international aid sent to Egypt increased dramatically. The IMF loan also comes after successive loans by wealthy Gulf State countries to Egypt failed to stimulate an economic reversal in the country.
Egypt has also been a longtime recipient of international military aid, particularly from the US. After halting military aid to Egypt after the 2011 uprising, the US resumed sending military aid to Egypt in 2015.