The International Monetary Fund (IMF) should delay a vote on a €4.6 billion ($5.2 bn) loan to Egypt scheduled for June 26, 2020, eight NGOs said on Wednesday in a joint letter, citing concerns about corruption and poor governance in the country.
“Recent developments in Egypt regarding governance, transparency, rule of law and corruption lead us to believe that the IMF should include strict requirements to ensure that any additional funds disbursed to that country are used for their intended purpose of supporting inclusive growth, improving fiscal transparency, and increasing health and social spending,” the letter read.
The NGOs that monitor corruption, governance, judicial independence and restrictions to civil society in Egypt, include the Cairo Institute for Human Rights Studies, the Committee for Justice, the Egyptian Human Rights Forum, EuroMed Rights, the International Federation for Human Rights (FIDH), the Freedom Initiative, Human Rights Watch, and the Project on Middle East Democracy.
“The lack of independence of Egyptian anti-corruption entities and the weakened role of the judiciary as well as abusive behaviour by the security apparatus all represent high risks for the business and investment environment in Egypt,” the NGOs added.
On June 5, IMF agreed with the Egyptian government to provide the country with funds to assist Egypt with tackling the aftermath of the Coronavirus crisis. The funds, which aim at strengthening the social safety net, improving fiscal transparency, supporting reforms for growth and job creation, and at maintaining macroeconomic stability, come on top of a $2.77 billion emergency assistance loan approved on May 11 to help the country respond to the pandemic.
As the IMF has not yet disclosed documents detailing the loan, the NGOs requested that strict conditionality is attached to the program, in terms of “robust anti-corruption requirements,” and that the loan terms are made public.
“We further urge the IMF to only approve the loan if there are sufficiently rigorous anti-corruption requirements in line with the Framework on Enhanced Governance adopted by the Fund in 2018, as well as its commitments to ensuring its response to Covid-19 consistently includes effective anti-corruption requirements and robust engagement with civil society,” the letter added.
With the loan program awaiting the approval of IMF’s Executive Board, the NGOs stressed that the IMF has identified corruption “as a key threat” to achieving its mission of advancing economic stability in the country.