NGOs urge IMF to delay $5.2 bn mortgage to Egypt over ‘corruption risk’

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The International Monetary Fund (IMF) ought to delay a vote on a €4.6 billion ($5.2 bn) mortgage to Egypt scheduled for June 26, 2020, eight NGOs mentioned on Wednesday in a joint letter, citing considerations about corruption and poor governance within the nation.

“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 learn.

The NGOs that monitor corruption, governance, judicial independence and restrictions to civil society in Egypt, embrace 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 authorities to supply the nation with funds to help Egypt with tackling the aftermath of the Coronavirus disaster. The funds, which purpose at strengthening the social security web, bettering fiscal transparency, supporting reforms for development and job creation, and at sustaining macroeconomic stability, come on prime of a $2.77 billion emergency help mortgage accepted on May 11 to assist the nation reply to the pandemic.

As the IMF has not but disclosed paperwork detailing the mortgage, the NGOs requested that strict conditionality is connected to this system, when it comes to “robust anti-corruption requirements,” and that the mortgage phrases 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 mortgage program awaiting the approval of IMF’s Executive Board, the NGOs confused that the IMF has recognized corruption “as a key threat” to reaching its mission of advancing financial stability within the nation.