In mid-September, Egyptian Prime Minister Mostafa Madbouly hinted at the possibility of not cooperating again with the International Monetary Fund (IMF) after the current program ends in 2026. The program, which has been ongoing for nearly a decade, provided Egypt with several loans in exchange for a series of tough economic reforms. These included the liberalization of the exchange rate, the reduction of energy subsidies, and the expansion of the state privatization program. While the government says these measures secured external financing and instilled a degree of confidence in international institutions, they also left severe social repercussions, including successive waves of inflation and a sharp decline in the purchasing power of large segments of citizens.
Madbouly’s remarks—made during a meeting with a group of chief editors and stressing that Egypt “will not need a new IMF program”—came at the same time as other striking statements by Mahmoud Mohieldin, the United Nations Special Envoy on Financing for Development. Mohieldin warned of sluggish economic growth in Egypt over the past 10 years and stagnant GDP indicators, questioning the feasibility of continuing on the same path.
Mohieldin, a prominent figure in the field of economics whose name has also been repeatedly mentioned in connection with possible appointments as prime minister or as a member of the economic cabinet—claims never confirmed nor denied by official bodies—stated in a televised interview that “since 2015 and 2016, the Egyptian economy has been on a continuous track of cooperation with the IMF under what became known as the ‘stabilization program,’ which is scheduled to end in November 2026.” He explained that this cooperation was tied to a crisis-management approach to the economy, but argued that the time has come to move beyond such a relationship. While necessary at the time to address financial and monetary imbalances that emerged in 2015, the arrangement imposed constraints on economic dynamics.
Egypt launched its current IMF cooperation in December 2022, when the Fund approved an Extended Fund Facility (EFF) worth about $7.45 billion, set to run until October 2026. In March 2025, a new arrangement was added under the Resilience and Sustainability Facility (RSF), worth about $1.22 billion, to address the government’s flexible financing needs amid current economic conditions. However, Cairo has had prior programs with the IMF since 2016, starting with the first EFF that followed the currency flotation and lasted until 2019, then an emergency Stand-By Arrangement (SBA) in 2020, alongside a Rapid Financing Instrument (RFI) in the same period. This makes Egypt’s engagement with the IMF a nearly decade-long experience, now culminating in a program extending to the end of 2026, which serves as the reference point for any official statements about an “exit from IMF programs.”
IMF vs. Egypt’s Military Economic Empire: IMF’s View and Egypt’s Response
What Drives the Government’s Decision?
Dr. Mahmoud El-Garraf, professor of international law and international economic law, argues that talk of Egypt’s ability to disengage from the IMF after 2026 is not grounded in reality. He described the government’s optimism—and the media’s support for such statements—as “ignoring the real crisis.” Speaking to Zawia3, he explained that growth rates have not been as stable as officially promoted since 2015, and that the Egyptian economy continues to suffer from deep structural problems that remain unresolved despite a decade of cooperation with the Fund.
El-Garraf noted that what has occurred is not an alternative plan but rather a temporary postponement of certain conditions, after the government found itself with some foreign currency liquidity it could rely on for a short period. But he warned that this liquidity will soon be depleted, forcing the government back to the same point: implementing IMF conditions in order to obtain more loans. “Talk of independent decision-making or final disengagement from the Fund is merely political rhetoric that does not reflect reality,” he said.
Economic researcher Mohamed Ramadan of the Egyptian Initiative for Personal Rights shares this view, saying that the Egyptian government usually turns to the IMF in times of crisis, considering it a provider of the “confidence certificate” the economy needs in front of investors and international markets. He added: “At present, there is no severe pressure on the balance of payments thanks to the recent sale of some state assets, which gave the government a temporary margin for maneuver. But the real question is: what will happen when a new crisis hits?”
Ramadan emphasized that the IMF only intervenes in moments of contraction and imbalance, aiming to restore confidence and stabilize macroeconomic indicators. However, the reforms tied to its programs have not yielded tangible results in Egypt over many years. He clarified that Egypt is not obligated to continue the program until its completion; it can halt cooperation at any time, even without receiving the full loan. “But experience has shown that returning to the Fund becomes inevitable whenever a new crisis emerges,” he concluded.
What Do the Numbers Say?
The latest IMF report, issued on August 31, shows that Egypt remains deeply bound to its commitments with the Fund, despite repeated government statements about “economic independence” or “readiness to exit IMF programs” in the coming years. According to IMF data, Egypt’s quota amounts to 2.03 billion Special Drawing Rights (SDR), yet the country has borrowed several times more than this quota. This means Egypt is currently using more than three times its allotted share of IMF financing, underscoring the extent of its reliance on external borrowing to meet financing needs.
It is worth noting that Special Drawing Rights (SDR) are an international reserve asset created by the IMF in 1969 to supplement the official reserves of member states and provide international liquidity that helps stabilize the global monetary system. SDRs are not a currency in themselves but represent a unit of account based on a basket of five major international currencies: the U.S. dollar, the euro, the Chinese yuan, the Japanese yen, and the British pound sterling. They are also used as an international financial instrument that member states can convert into freely usable currencies through agreements with other countries. Fundamentally, SDRs serve as a monetary reserve that supplements a nation’s foreign exchange reserves and can be employed to settle international payments or repay IMF loans.
Egypt’s Ongoing Programs with the IMF
Egypt is currently engaged with the IMF on two programs. The first is the Extended Fund Facility (EFF), worth 6.11 billion Special Drawing Rights (SDR), approved in December 2022 and set to end in October 2026. Of this, Egypt has withdrawn only 2.42 billion SDR so far. The second is the Resilience and Sustainability Facility (RSF), valued at 1 billion SDR, launched in March 2025 and also scheduled to conclude in October 2026. No withdrawals have yet been made from this program.
Looking ahead, Cairo faces heavy debt repayment obligations to the IMF over the next five years, with 2026 and 2027 marking the peak of these commitments. In 2026 alone, repayments will exceed 2 billion SDR—equivalent to roughly $2.6 billion at current market rates. This financial burden represents the peak in a repayment schedule that gradually tapers off through 2029.
Compared with the COVID-19 pandemic period between 2020 and 2021—when Egypt resorted to emergency loans and a Stand-By Arrangement worth more than 5.7 billion SDR to cope with the sudden collapse of tourism and investment—the current situation reflects a complex structural crisis, according to observers. The ongoing cooperation with the IMF, through the EFF and RSF, underscores the country’s struggle with high external debt pressures and persistent balance-of-payments deficits, alongside deeper challenges tied to productivity and industrial output in the domestic economy.
The Growth of Egypt’s External Debt
Over the past decade, Egypt’s external debt has climbed sharply. In June 2015, it stood at just $48 billion, rising to about $55.8 billion by the end of 2016. Following the IMF-backed economic reform program in 2016 and the subsequent currency flotation, debt jumped to $82.8 billion in 2017. The upward trend continued: $96.6 billion in 2018, $106.2 billion in 2019, and more than $123.5 billion in 2020.
Amid the fallout of the COVID-19 pandemic, external debt surged to $137.8 billion by the end of 2021, then to $162.9 billion at the end of 2022. In 2023, it reached about $168 billion before edging down slightly to $155 billion in January 2025, according to the latest data from the Central Bank of Egypt.
Expert Analysis
Economist and Popular Alliance Party leader Elhami El-Merghany told Zawia3 that Egypt repaid about $38 billion in external loans in 2024, according to the prime minister. The World Bank also revealed that Egypt faces a massive challenge in servicing $43.2 billion in external debt obligations during the first nine months of 2025. According to El-Merghany, this figure reflects accumulated foreign debt repayments, including loans, deposits, and currency swap agreements owed by the Central Bank and commercial banks. Of the total, $5.9 billion relates to interest payments, while $37.3 billion covers loan principals—posing significant repayment challenges for the government, the central bank, and commercial banks.
El-Merghany further explained that the government pledged in its letter of intent to the IMF—submitted prior to receiving loans since 2016—to sell state assets. “Everything it has done since then is sell whatever it owns to service debts and fulfill the divestment commitments it made to the Fund,” he said. In line with this approach, the government has transferred dozens of public hospitals to specialized councils and passed legislation allowing the leasing of public hospitals. He added: “We all witnessed what happened at Al-Haramel Hospital and how poor patients were deprived of treatment, exactly as we had warned. The government is also proposing to lease industrial schools. It has turned itself into a broker of sales and leasing operations, regardless of development or Egyptians’ right to healthcare and education.”
Egypt’s Fifth IMF Review Sparks Controversy Over Asset Sales and Public Services
Does the Government Have an Exit Plan?
Dr. Mahmoud El-Garraf argues that Egypt cannot walk away from the IMF for five fundamental reasons. First is the sheer size of its external debt, which has surpassed $165 billion. Second, having an IMF program serves as a certificate of confidence for investors and global markets. Third, the IMF acts as a gateway to global financing funds, since many international institutions require its approval before granting any loans or investments.
The fourth reason lies in Egypt’s reliance on borrowing to secure U.S. dollars and cover its balance of payments deficit. The fifth is the chronic trade deficit and weak exports, coupled with heavy dependence on imports.
El-Garraf stressed to Zawia3 that what is unfolding now is “chaotic economic management.” He pointed out that even the recent increase in fuel prices—despite government assurances that it was the last hike—is a direct reflection of Egypt’s continuing entanglement with the IMF. He added: “Official statements portraying this as an independent domestic decision or a new stage of economic sovereignty contradict the reality that Egypt remains bound by commitments to the Fund. What we are witnessing today is simply a show of loyalty, following ill-considered statements that fail to reflect reality.”
The professor insisted that the solution does not lie in relying on political rhetoric or temporary band-aids but in working seriously to cut consumption and implement genuine austerity measures, without touching strategic goods that directly affect people’s lives. “Price hikes may be the government’s easiest option, but it is a one-way road. Once prices rise, they never come down, and the final outcome is more pressure on citizens without addressing the root of the crisis,” he said.
Economic Policy Choices Under Scrutiny
Looking back at the past decade, economic researcher Mohamed Ramadan noted that Egypt’s economy has not achieved any substantial progress, and that the blurred lines between IMF proposals and government choices need close examination. He emphasized that the path taken by the Egyptian government in recent years was not imposed in full by the IMF but was the result of declared domestic policy choices, with the Fund’s role limited to periodic reviews and providing feedback. “The widespread belief that the IMF enforces harsh external conditions does not reflect reality. In fact, the Egyptian government held the upper hand in drawing up its economic policies,” he said.
According to Ramadan, the core of the crisis lies in weak productivity and limited domestic manufacturing capacity—problems that remain unresolved. He added: “The IMF attributed this situation to the state and sovereign bodies’ involvement in the economy. But this explanation is not accurate. Structural reforms can still be achieved even with state involvement, provided governance, anti-corruption measures, and fair competition are ensured.” He argued that the government erred by prioritizing infrastructure projects and the real estate sector at the expense of industry, innovation, and high-value-added sectors. “Abandoning that path would have been far more crucial than announcing an exit from the IMF,” he said.
Ramadan concluded that after ten years of cooperation with the IMF, Egypt has not achieved a genuine economic leap—not because of the IMF alone but due to the economic choices pursued by the government itself. “Talk of a definitive end to cooperation with the Fund is nothing more than a political headline. In reality, Egypt will continue to need this international framework whenever a new crisis emerges,” he said.
The Latest IMF Agreement
Egypt has been engaged for years in a complex process of economic reform in cooperation with the IMF. The latest chapter was the December 2022 agreement to secure a $3 billion loan under the Extended Fund Facility (EFF), a program designed to correct economic imbalances and boost growth led by the private sector. Although the agreement included eight periodic reviews to evaluate reform progress, implementation lagged. The first and second reviews were delayed, and the third and fourth were merged, casting uncertainty over the fifth review, which began under mounting economic pressure.
These pressures included an acute foreign currency crisis, record-high inflation, and a steep, rapid depreciation of the Egyptian pound, pushing the government to seek urgent solutions. Among them were accelerating the privatization program and selling some state assets to domestic and international strategic partners. By the time Egypt entered the fifth review, the sale of public assets had emerged as one of the IMF’s key conditions—sparking heated debate at home, especially after reports circulated that sensitive public service institutions, such as government hospitals and certain public agencies, were being considered for sale.
On March 11, the IMF completed its fourth review of Egypt’s loan program, enabling the government to draw an additional $1.2 billion tranche. This brought Cairo’s total withdrawals to about $3.207 billion out of the $8 billion agreed loan—roughly 40% of the original value, equivalent to nearly 119% of the quota Egypt is entitled to borrow from the Fund.
The fifth review officially began in May, after repeated delays raised concerns about the government’s commitment to the agreed program. It followed the disbursement of the fourth tranche in March, worth $1.2 billion, which came after a positive evaluation of the combined third and fourth reviews. The fifth review focuses on several critical areas: completing the full liberalization of the exchange rate, reducing the state’s role in the economy, strengthening transparency in public institutions, and accelerating the sale of state-owned assets—including profitable companies and public service bodies. The latter has proven to be the most contentious issue, especially amid reports that the private sector could be brought in to manage or own sensitive public service institutions, such as teaching hospitals.
