CAIRO: Cairo is hoping to start announcing details of its investment program for this fiscal year later this month and Gulf Arab countries have agreed to provide additional financial support, a senior minister said.
Ziad Bahaeddine, deputy prime minister for economic affairs, did not say how much Saudi Arabia, Kuwait and the UAE would contribute but it would be in addition to the $12 billion that they agreed to give Cairo in aid after the army ousted Islamist President Mohammad Morsi on July 3.
Egypt’s Cabinet has flagged a 120 billion Egyptian pound investment program for the fiscal year through June 2014.
“Discussions with the Emiratis have been going on for some time, and the final program has not yet been announced due to the caution on both sides to make promises that have not been fully worked out,” Bahaeddine told Reuters Sunday.
“I am hoping that we will announce at least the first package of projects soon,” he said. “It will be soon, it could be within days.”
Bahaeddine said the Gulf countries had agreed in principle to invest in projects that are part of the Planning and Finance ministries’ program.
“There are programs that we the government are committed to spending on in any case. They are saying, I will undertake the expenditures on that,” Bahaeddine said. “This is a form of budget support.”
The three Gulf countries have also agreed to supply Egypt with badly needed oil products until the end of December, Oil Minister Sherif Ismail said last week, and Egypt has been in talks with them to continue the supplies into 2014.
Bahaeddine is part of a transitional government that was appointed after Morsi’s ouster until a new constitution can be drafted and a new Parliament and president elected. The transition is scheduled to be finished next spring.
The interim government has said it would avoid austerity measures and instead stimulate the economy by pumping in funds.
It wants to avoid unpopular moves to plug the budget deficit such as increasing taxes or cutting food or energy subsidies that eat up around a fifth of the state budget.
Bahaeddine said that the Kuwaitis, who in late September deposited $2 billion with Egypt’s central bank, were also ready to provide project finance.
Saudi Arabia’s ambassador to Cairo said in August that the kingdom was studying a report submitted by Egypt detailing its financial needs through June 2014.