Egypt’s economy to decline due to COVID-19 impact: IMF

People travel on an overcrowded train in Cairo, Egypt, July 9, 2020. REUTERS/Mohamed Abd El Ghany

The International Monetary Fund expects a decline in Egypt’s economy due to the impact of the COVID-19 pandemic on the North African country.

Uma Ramakrishnan, the IMF’s mission chief for Egypt, said in an interview with the IMF Country Focus that the Arab nation had “experienced capital outflows of nearly $16 billion” during the peak of the global risk aversion in March and April.

“With the global economy in recession and domestic activity curtailed, growth is expected to significantly decline. Moreover, revenue is falling just as the government needs to urgently ramp up spending on health and social protection,” he said.

Egypt is one of the worst affected countries by COVID-19 in Africa, having reported 80,235 cases and 3,702 deaths, according to data from the U.S.-based Johns Hopkins University.

Ramakrishnan however feels that the situation could have been worse if Egypt had not embarked on reforms before the pandemic struck.

“Before the pandemic, growth was above 5 percent, international reserves were comfortable, and debt was on a downward trajectory. The government had also embarked on additional reforms to enhance the business environment and adopt a private sector-led growth model to enhance job creation.  These steps allowed the government to swiftly launch a comprehensive pandemic response,” he said.

As the world continues its battle against COVID-19, focus ha shifted to the search and development of a vaccine.

With that in mind, Billionaire philanthropist Bill Gates called for COVID-19 drugs and an eventual vaccine to be made available to the countries that need them the most, and not to the “highest bidder,” saying relying on market forces would prolong the deadly pandemic.

“If we just let drugs and vaccines go to the highest bidder, instead of to the people and the places where they are most needed, we’ll have a longer, more unjust, deadlier pandemic,” Gates, founder of Microsoft, said in a video released on Saturday during a virtual COVID-19 conference organized by the International AIDS Society.

“We need leaders to make these hard decisions about distributing based on equity, not just on market-driven factors,” he added.