By Mohamed Ayyad
The government has earmarked EGP 200 million for the Egyptian Radio and Television Union (ERTU) to address the financial crisis that has struck the sector after employee salaries were suspended.
Fayza Abul Naga, Minister of International Cooperation, said that the National Investment Bank (NIB) pledged to provide an EGP 100 million loan in addition to EGP 100 million provided by the state treasury.
Abul Naga added that the funds would be transferred today as a short term solution, adding that the long term solution to the crisis lies in addressing the problem of the Ministry of Information’s loans to the NIB, which total more than EGP 17 billion.
Momtaz Said, Minister of Finance, met with Ahmed Anees, Minister of Information, and Amr El-Garhy, President of NIB, to discuss scheduling the EGP 17 billion in debts. “More meetings will follow in order to discuss the debts,” said Abul Naga.
She described the ERTU’s loan problem as not new, saying that it is complicated and multifaceted.
Abul Naga predicted that Egypt’s credit rating would improve in the coming period with the return of political stability.
An improved credit rating would make foreign borrowing less costly for Egypt, according to Abul Naga. She added that Egypt’s recently downgraded credit rating was due to the lack of political stability and the breakdown of security, not the decrease in Egypt’s foreign currency reserves.
She said that despite the downgraded credit rating, Egypt’s actual creditworthiness had not changed, adding the Egypt respects all agreements made with parties outside the country. She went on to say that Egypt’s currency is stable and that the Central Bank and worked to prevent any disruptions in the exchange rate, despite the fears of some observers and foreign newspapers that the Egyptian pound was on the verge of collapse.
Abul Naga insisted that she was not the reason for the halted negotiations with the International Monetary Fund (IMF) for a loan to Egypt. She said that the IMF’s demand that the Freedom and Justice Party (FJP) approve the loan was not possible during the time that the negotiations were carried out. She added that the loan will represent a certificate of merit for Egypt and will encourage domestic and foreign investment.
The Ministry of International Cooperation is prepared to issue report detailing all loans and grants that Egypt has received in period after the revolution. Egypt has received approximately EGP 4 billion in loans and other forms of financial aid since December 2011.
Egypt is currently considered a low risk country for lending because it has never been late on any debt payments.
