Egypt unveils $4.9 billion stimulus package to aid struggling economy

Egypt’s interim government unveiled its second stimulus package on Monday, which will inject 33.9 billion Egyptian pounds into the economy, with most of that money coming from aid pledged by the United Arab Emirates. Initially, the finance ministry said Egypt planned to spend around 30 billion Egyptian pounds and launched the first stimulus package in August.

Ahmed Galal, the finance minister, said in a statement on Monday that the new spending would be financed mostly by the United Arab Emirates, one of the Gulf Arab countries that has pledged billions of dollars in support for Egypt. Three years of political unrest, since a popular uprising ousted Egyptian President Hosni Mubarak, have scared away investors and tourist leading to a halt on economic growth.

The army toppled Islamist President Mohamed Morsi in July, leading to another civil unrest. Security forces have killed about 1,000 Morsi supporters and arrested many more in a tough crackdown. Analysts state that the army-backed authorities are anxious to get the economy moving again in order to shore up public support as the government moves along a political transition plan leading to elections this year.

Nearly 20 billion Egyptian pounds will be spent on development projects and 2 billion pounds would be directed towards developing a corridor around the Suez Canal under the second stimulus package, according to the statement. Furthermore, twelve billion pounds will go towards financing social programs, including a rise in the minimum wage.

Source: The Africa Report