President Mohamed Morsi met with the US Secretary of State John Kerry on the sidelines of the African Union Summit in Addis Ababa on Saturday, where they discussed economic and social reforms in Egypt. Kerry told Morsi that continued US assistance to the state hinged on Egypt’s progress on achieving reforms, state-owned Al-Ahram reported.
Kerry reportedly told Morsi he must accelerate economic reforms in order to be given the $4.8bn loan from the International Monetary Fund (IMF), which would spur further investments from congress.
The IMF loan acts as a green light for investors such as the European Union and the US, which have withheld the lion’s share of pledged investments until the IMF shows confidence in the Egyptian economy.
A deal with the IMF was nearly reached last December, but political instability as a direct result of Morsi’s constitutional decree forced the government to stall the agreement.
The IMF is demanding Egypt undergo several austerity measures aimed at reducing the deficit. One of the requirements would be to cut subsidies, a contentious issue for the government as millions of Egyptians are heavily reliant on subsidies of both food and fuel.
