IMF approves $2 billion loan instalment for Egypt

The International Monetary Fund on Wednesday approved the third instalment of a $12 billion, three-year loan for Egypt, bringing the total released to date to just over $6 billion.

The IMF and Egypt had agreed the loan in November 2016, as the North African country devalued the pound and introduced a value-added tax in a bid to boost government finances and its foreign reserves.

In order to obtain IMF approval for the loan, Egypt has implemented a set of drastic reforms, adopting a value-added tax, cutting energy subsidies and floating its pound.

But the IMF said the country still has work to do.

"The outlook is favourable, but will require sustained efforts to maintain prudent policies and advance structural reforms to support the authorities' medium-term objective of inclusive growth and job creation," said David Lipton, IMF first deputy managing director.

He said "reform of energy subsidies is critical for achieving the program's fiscal objectives," and to keep government debt on a downward trajectory. 

And authorities will need to implement tax reforms and modernize tax and customs administration to free investment in other areas.

Economic grievances had fuelled the 2011 uprising that overthrew long-time President Hosni Mubarak, ushering in years of unrest that decimated tourism and investment.

Many Egyptians now are weary of further unrest, while the government shows little tolerance for dissent, having jailed thousands of Islamists and secular dissidents over the past few years.

Poverty remains rife and the austerity measures introduced by the government have sent shockwaves through society.