The World Bank will disperse a US$1 bn loan instalment to Egypt contingent upon the Egyptian parliament’s approval of the government programme, said Vice President of the World Bank for the Middle East and North Africa Hafez Ghanem at a press conference on Tuesday.
The loan instalment is a portion of the $3 bn loan package signed between the government and Egypt in December 2015. Ghanem discussed the loan to Egypt
The government’s programme implementation of the Value Added Tax (VAT) is one of key conditions for the deployment of the first instalment, said Ghanem. The World Bank agreed to provide Egypt with $1.5bn per year constituted by $1bn provided to support the state budget and $500m to finance developmental projects, he continued.
The World Bank has solicited the support of the International Monetary Fund to approve the loan to Egypt as the IMF specialises in financial and economic reform while the World Bank focuses on development and poverty reduction.
The World Bank currently provides $400m for the takaful wa karama or solidarity and dignity programme. The international lending agency also funds public housing projects, as well as development and agricultural projects in Upper Egypt.
Ghanem affirmed that the World Bank will support social protection programmes until larger material frameworks are established to reach those outside of the capital. Eventually, the infrastructure will supplant commodity subsidies.