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African Business: Are Egypt’s IMF-imposed reforms working for people?

With the increasing strain on the people, more are wondering whether IMF straitjacket is too restrictive for Egypt’s ordinary citizens.
05.07.17 | Interesting article at African Business

Grinding their way through some of the world’s slowest traffic lanes, the unfortunate drivers of Cairo are wearily familiar with their tedious daily commute.

But for the Egyptian government, there can be no better captive audience than this cursing, exhausted throng of motorists. Alongside the city’s highways, authorities have erected dozens of billboards in a bid to persuade Egyptians to back crucial IMF reforms aimed at reversing decades of economic stagnation.

The billboards – daubed with motivational messages urging the country to “shorten the road” of reform – are just one salvo in a PR campaign aiming to mobilise public support for the imminent second tranche of the IMF’s critical $12bn loan.

But as Egypt’s hard-pressed citizens begin to feel the impact of the deal’s stringent austerity measures – including reduced government spending, new taxes and a radical currency revaluation – questions are being asked about whether the government of President Abdel Fattah al-Sisi is committed to the path of reform – and whether the IMF straitjacket is too restrictive for Egypt’s ordinary citizens.

“Egypt has largely complied with the conditions set out at the start of the programme so far,” says Jason Tuvey, Middle East economist at Capital Economics. “The key ones were floating the currency, undertaking subsidy cuts, introducing VAT and other fiscal consolidation measures. The issue is whether that continues over the rest of the programme.”