The International Islamic Trade Finance Corporation (IITFC), a branch of the Islamic Development Bank, has provided $265 million in funding to Egyptian General Petroleum Corporation (EGPC).
This raises the amount of money provided to the EGPC by the IITFC since October last year to nearly $500 million to help the state to secure a larger number of basic goods and other necessities for its citizens. This would include petroleum products, wheat and other foodstuffs.
Prime Minister Hesham Qandil signed what is called a Murabha Agreement on Wednesday, which was also signed by Sharif Hadara, the new head of the EGPC, and Walid Al-Wahib, Executive President of the IITFC.
This represents the second installment of a previous agreement signed between the two parties on July 1, last year, which stipulated the that IITFC would provide the EGPC with funding totaling $1 billion.
The signing ceremony was attended by Egypt’s Finance Minister Al-Morsy Al-Hijazi, Osama Kamal, Egypt’s Petroleum and Mineral Resources Minister, Ashraf al-Arabi, Minister of Planning and International Co-operation, Walid al-Wahib, Executive President of the IITFC, and Zinhum Zahran, Executive Direct of the Islamic Development Bank.
Hijazi said this deal was part of another $2.2 billion agreement signed between the IITFC and the Egyptian government back earlier in 2012, which sought to help the government secure and distribute a larger number of basic goods and necessities to its citizens.
He said these agreements reflected the confidence felt by regional and international institutions regarding the Egyptian government’s ability to abide by its international obligations by their designated deadlines.
The government, which has been caught between recognizing the need for strict economic overhauls and simultaneously fearing a public backlash, has stalled on important measures that would give the nation its best chance of recovery.
The president has delayed reforms of energy subsidies, the biggest burden on the budget, and reneged on other cost-saving plans, including a curfew on shops and restaurants that was intended to conserve energy at a time of critical gas shortages.
Now the Muslim Brotherhood’s political future rests on its ability to make an impact on the economy, but economists and politicians say political turmoil has made that nearly impossible.
The government is on the one hand fully convinced they should have an agreement with IMF, but at the same time they are reluctant to take any steps that were agreed because of the voting that took place on the Constitution.
EGPC is a national oil company of Egypt which owns 70 percent of shares in the Egyptian Natural Gas Company as well as a 75 percent stake in the petroleum-industry support airline Petroleum Air Services. The remaining 25 percent is held by the British firm Bristow Group.
