The IMF issued a press release on 11 November 2016 commenting on Egypt’s reform program following the approval of an extended fund facility (EFF) for Egypt.
Egypt has developed a program of structural reform supported by the EFF to boost growth and create employment while protecting vulnerable parts of society. The program aims to restore macroeconomic stability and support inclusive growth. Policies will be introduced to restore competitiveness, reduce the budget deficit and public debt, increase economic growth and boost employment.
As part of reducing the fiscal deficit and bringing down public debt key policy measures include the introduction of a value added tax (VAT) in addition to the reduction of subsidies and rationalizing the public sector wage bill. Tax revenues are projected to increase by 2.5% during the progam, mainly due to the implementation of the VAT which was approved by parliament in August.
The program aims to create an environment that facilitates private sector development. Measures are to include streamlined industrial licensing for businesses; greater access to finance for small and medium enterprises; and new procedures relating to insolvency and bankruptcy. Measures will also be introduced to encourage training schemes for youth and to increase the participation by women in the labor force.
