Egypt faces $9.7 billion in external financing needs this fiscal year and remains heavily dependent on loans and international assistance, while privatization revenue has fallen sharply, according to the IMF’s seventh review of the country’s Extended Fund Facility program, published Thursday.
According to the seventh review data, the $9.7 billion reflects the gap between Egypt’s external revenues and expenditures, as well as an expected decline in foreign currency reserves during the same period.
Loans from international institutions are the main source of financing, including $3 billion from the IMF, $1 billion from the World Bank and $3.5 billion from the European Union, along with $1.8 billion in inflows from sources the IMF did not identify.
For months, Prime Minister Mostafa Madbouly has said the government does not intend to sign any new financing agreements with the IMF after the current program ends near the end of the year, following repeated criticism of the international lender’s intervention in domestic policy.
Egypt signed a package of financing agreements in 2024 following a severe financial crisis, most notably an agreement with the European Union under which it has so far received 3.5 billion euros and is expected to receive another 1.5 billion euros soon, according to previous statements by Egypt’s foreign minister.
But the IMF’s seventh review points to a limited role for privatization revenue in meeting external financing needs compared with international loans.
Privatization revenue is expected to contribute only about $400 million in 2026/27, after asset sales contributed $3.5 billion toward external financing needs in fiscal year 2025/26.
Privatization is one of the main alternatives to borrowing, but IMF data show that the program faced several obstacles that prevented it from delivering the hoped-for results.
After the government raised $2.2 billion from asset sales under the current program, privatization slowed by the end of 2023-24 for reasons including market conditions. The government later made up some of the shortfall through the $3.5 billion Alam Al-Roum deal.
The IMF expected the government to raise at least $500 million by July-August 2026 through major deals, most notably the Gabal El-Zeit power plant, which has already been completed, and Misr Life Insurance, which is being prepared for sale.
The IMF is also targeting another $1 billion through expanded public offerings on financial markets and concession offerings.
Beyond financing and privatization, the IMF continued to flag shortcomings in structural reforms, including at the Egyptian General Petroleum Corporation (EGPC).
The IMF said that despite stringent government measures to shore up EGPC’s finances, including higher fuel prices and the payment of arrears to foreign extraction companies in June, those steps were not enough to contain the risks. The corporation “continues to suffer from a high debt ratio, with massive interest expenses continuing to weigh on its financial performance,” the IMF report explained.
The Egyptian government has faced criticism over successive energy price increases introduced to implement IMF recommendations, most recently parliamentary moves opposing a 12% increase in electricity prices several weeks ago.
Egypt is expected to complete the eighth and final review of the Extended Fund Facility program in November. The program has run for almost four years since it was approved in December 2022.
