The Egyptian government unveiled a new strategy this week, dubbed the “National Narrative,” aiming to outline a post-IMF economic vision that could help the country wean off its dependence on the global lender.
Experts warn the timing may be opportune, but the risks are formidable. Years of infrastructure investment have positioned the economy for private sector growth. Yet, Egypt’s deep structural flaws and persistent financing gaps raise doubts over whether the country can truly walk away when its current IMF program ends in 2026.
Heavy reliance on the IMF
Since 2016, Egypt has signed successive loan agreements with the IMF totaling more than $20 billion, making it one of the Fund's largest borrowers. The latest deal, launched in 2022, is set to expire in November 2026.
“Turning to the IMF during balance-of-payments crises isn’t unusual,” Hany Genena, head of research at Pharos Holding told Al Manassa. “What’s unusual is how often we’ve done it,” he added.
Genena explained to Al Manassa that most countries typically seek IMF help only once or twice. “Turkey, for instance, completed its last program between 2001 and 2003 and hasn’t returned since. The same goes for South Korea, which last sought IMF support in 1997.”
He argued that Egypt should avoid new reform programs unless an extreme shock, such as a natural disaster or regional war, forces it back.
At the launch event for the national narrative, Prime Minister Mostafa Madbouly pledged to drive down public debt to the lowest possible level, but stopped short of specifying a target. Genena described this shift as potentially “transformational,” indicating a move away from debt-driven spending toward fiscal surpluses dedicated to debt repayment.
Economic expert Hany Aboul Fotouh said detaching from the IMF would be “difficult but possible,” though success would hinge on Egypt’s ability to stabilize foreign currency inflows, boost reserves, attract foreign direct investment, and close its external financing gap.
In its July review, the IMF projected that Egypt would face an $8.2 billion external financing gap this year. The Fund advised Cairo to accelerate privatization efforts, flagging that the sale of state assets had slowed in recent months.
“The 'narrative' aims to build a stronger, more self-reliant economy,” Aboul Fotouh told Al Manassa. “That could mean steadier jobs and fewer debt shocks,” he explained.
The right moment for reform?
The government has yet to publish the full text. But officials said the plan runs through 2030 with ambitious targets: boosting GDP growth to 7% from 2.4%; raising exports by 20% annually to shrink a $39.5 billion trade deficit in FY2023/2024; and expanding the private sector’s GDP share to 82% from 77.1%.
The draft is expected next week and will be open for public consultation for two months, with expert revisions due in December.
Genena said timing could work in Egypt’s favor. A decade of mega-projects, especially in transport and logistics, may now support growth in interconnected industries.
Over the past decade, the National Authority for Tunnels received over $10 billion for rail and metro projects, as previously reported by Al Manassa, and continues to seek funding for high-speed and light rail lines.
Genena also noted that currency flexibility under the IMF deal improved export competitiveness. Meanwhile, US protectionist trade policies may push manufacturers to relocate to Egypt for American market access.
“Rising inflation in Turkey has pushed up production costs there, making Egypt more competitive globally, especially in textiles,” he said.
Risks on the horizon
Still, Aboul Fotouh cautioned that geopolitical instability could undermine progress. On Tuesday, Israel carried out an airstrike in Doha targeting Hamas officials, extending its military assault in Gaza and the region to reach a Gulf country for the first time.
Maye Kabil, a researcher at the Egyptian Initiative for Personal Rights, questioned whether the “national narrative” addresses Egypt's structural problems. “This document repeats many elements of the IMF-led program. Rebranding it as a 'narrative' doesn’t make it a new vision,” she told Al Manassa.
She also criticized Egypt's dependence on palliative cash inflows from the Gulf. “Debt keeps rising even after Ras El-Hekma proceeds. Future deals won’t mend structural flaws,” Kabil noted.
Kabil concluded that without long-term job creation and production-oriented policies, Egypt risks ending up back with the IMF.
