Egypt's IMF programme nears its end with state ownership reform the open item

Egypt's IMF-backed programme enters its final months with the State Ownership Policy, the centrepiece of the structural agenda, still awaiting a Cabinet-approved execution plan. The IMF Executive Board completed the seventh review of the Extended Fund Facility and the second review of the Resilience and Sustainability Facility on 30 July 2026, releasing SDR 1.11 billion (about US$1.5 billion) under the first and SDR 200 million (about US$272 million) under the second, according to the staff report. Total disbursements under the two arrangements stand at about SDR 5.4 billion, or US$7.3 billion, and the EFF ends in December 2026.

The Fund's own framing, in a Country Focus feature of 21 September, is that Egypt's economy defied expectations through regional war spillovers, helped by a swift policy response, strong buffers and a flexible exchange rate, but that more decisive reform implementation is needed to reduce vulnerabilities. The feature puts gross financing needs at around 40 per cent of GDP in the near term, falling below 30 per cent only by 2030.

A new ownership policy, not yet a plan

The revised State Ownership Policy for 2026 to 2030 replaces the 2022 version and moves from a sectoral approach to a full ownership management framework, the report says. It creates a state-owned enterprise unit to coordinate implementation, triage the portfolio into companies to retain, restructure or divest, and manage transfers to the Sovereign Fund of Egypt. It also covers competitive neutrality and corporate governance aligned with OECD standards. Publication of the updated policy was an end-March benchmark that was missed, and the new structural benchmark is a Cabinet-approved execution plan with time-bound actions.

The earlier review had already flagged the gap. In February the Fund said divestment was moving slowly, that the primary balance had missed its target because programmed proceeds did not arrive, and that reducing the state's footprint was essential to attract private investment.

Divestment: targets and what has arrived

The original programme target was US$8.7 billion of proceeds, with half for debt reduction, the report says. A prior action for the seventh review required at least US$500 million from key transactions by July 2026, including a 100 per cent stake in Gabal El Zeit and some Ministry of Finance shareholdings, and an irreversible agreement for the sale of a 20 per cent stake in Misr Life Insurance. The IMF's press release puts divestment proceeds at around US$520 million.

The programme now targets about US$1.5 billion by its end, with an estimate of US$920 million for 2026/27, the report shows. The pipeline is shifting towards public offerings and management concessions for 11 airports, with initial progress on one airport supported by the IFC, and staff advise against relying on land sales as stop-gap measures. At least half of proceeds go to debt reduction.

Benchmarks met, missed and due

The report records the end-June action plan to simplify business procedures as met, covering 90 licensing authorities and 468 economic activities. It records as missed the benchmark on the 2026/27 tax package, because Parliament did not adopt the withholding tax on free zones, and as delayed the customs law amendments, which went to Parliament a month late in March.

The review set three new benchmarks: Cabinet approval of an executive plan for the State Ownership Policy and a progress report on the viability plan of the Egyptian General Petroleum Corporation, both due by end-September, and gazette publication of the withholding tax on free zones by end-November. A final status report on the two largest state-owned banks was also due by end-September, as was the recurring report on payment arrears. The petroleum corporation is the main fiscal risk among state companies, and Egypt cleared US$6.2 billion of arrears to international oil companies in early June, the report says. Governance diagnostics of National Bank of Egypt and Bank Misr are complete, and the central bank has finalised a time-bound corrective action plan.

On competition, Parliament approved amendments in April 2026 that strengthen the Egyptian Competition Authority's independence and let it impose direct administrative sanctions, according to the staff report. The report projects a primary surplus of 4.8 per cent of GDP in 2025/26 and 5 per cent in 2026/27, with public debt at 91.1 per cent of GDP in 2025/26.

Correction, 24 October 2026: An earlier version said four new benchmarks fall due in the autumn and counted the state-owned banks' report and the arrears report among them. The review set three new benchmarks: the executive plan for the State Ownership Policy, the progress report on the petroleum corporation's viability plan and gazette publication of the free-zones withholding tax; the banks' report and the arrears report were set earlier. It also said the central bank and the banks agreed the corrective action plan; the IMF report says the central bank finalised it.