IMF Delegation To Visit Egypt This Week To Work Out Details Of $4.8 Billion Loan Needed To Buy Food

 @angeloyoung_a.young@ibtimes.com
on March 31 2013 3:31 PM
IMF Managing Director Christine Lagarde
IMF managing director Christine Lagarde Reuters

An International Monetary Fund delegation is traveling to Cairo Wednesday to work out details of a $4.8 billion loan to Egypt as it struggles with a grave post-Arab Spring economic crisis and skyrocketing food inflation in a country where about 40 percent of the population lives on less than $2 a day.

Government spokesman Alaa El Hadidi confirmed the visit Sunday, but denied that Egypt is seeking an emergency loan to fund the import of commodities upon which the predominately desert country relies to feed its population, according to Reuters.

Egypt is reeling from two years of political unrest and pummeled foreign currency reserves it needs to import wheat and fuel. It's the largest importer of the food staple, and it nearly faced a crisis last fall when Ukraine and Russia came close to curbing exports in the face of droughts in their agricultural breadbaskets.

Meanwhile food inflation has been rising nearly by double-digit levels year-over-year, leading the government in January to warn its population “not to overeat,” according to the Aswat Masriya newspaper. Such food insecurity has been linked to political and social unrest, and Egypt, with a large population of unemployed youth, is no exception.

“I can tell you that we are now expecting a staff team to travel to Egypt in the first days of April to continue to work with the authorities on a possible financial arrangement,” Gerry Rice, the IMF’s director of external relations, said as a press briefing on Thursday.

Masood Ahmed, IMF director for the Middle East and Central Asia, visited Cairo on March 17 to reiterate the development bank’s commitment to working with the administration of President Mohammed Morsi.

The country has also been struck by recent fuel shortages after the government halted fuel subsidies. The government has said it plans to implement fuel rationing as early as July.

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