Ahead to reaching an agreement with the International Monetary Fund (IMF), Abdel Fattah al-Sisi warned Egyptians of hard days.
Al-Sisi stated on Monday that tough measures would be needed to turn the country’s ailing economy around, as the government negotiates a $12 billion loan programme with the International Monetary Fund, reported Reuters.
Known for his emotional speeches rather than actions al-Sisi told the Egyptians that the government needed their support to weather the storm.
He is mainly trying to pave the road for the public opinion to receive the severe strict measures in the coming days. The measures will include subsidy cuts, tax reforms, and privatizations of state-owned companies which will directly affect the low income population.
At a leadership conference, al-Sisi told young people trying to use his emotional language that “The problem is whether public opinion is prepared to accept the measures which could be tough or harsh.”
Then, he returned back putting the Egyptian public in full responsibility for the accomplishment of the IMF loan saying that “Egyptians love their country and are able to face hardship but they are too busy with their daily lives and thus must be afforded the correct information regarding the measures.”
Last week , Egypt said it was seeking $4 billion a year over three years from the IMF to help plug a funding gap. The government hopes to finalize the deal in August.
Reuters reported,”Sisi’s government has been at pains to avoid a public backlash by showing that reforms are home-grown and not imposed from outside.”
Egypt has been struggling a harsh economic crisis due to the withdrawal in tourism sector and foreign investments which are the key sources of hard currency. In addition,the gap between the Egyptian pound’s official and black market exchange rates has widened to more than 40% although news of the loan has underpinned the local currency.
Al-Sisi has also promised the Egyptian public that it would “very soon” they will be able to purchase U.S. dollars at a unified rate, adding: “The next few days will see a lot of good news for the Egyptian people.”
On the other hand, Four traders on the black market said that their volumes of business had fallen as people wait to find out more details about the IMF loan programme and a possible devaluation of the Egyptian pound.
They said they were making only small transactions at a price of 12.30-12.70 pounds per dollar, unchanged from, as reported by Reuters.
One trader said,”Some people are worried and others are waiting for the green light on the IMF loan. There is caution in the market over the possibility of the flotation of the pound.”
“Buying and selling is limited and Sisi’s remarks will create apprehension in the market,” said another.