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HomeAfricaIMF: Egypt, Jordan, and Morocco Implemented Comprehensive Subsidy Reform Plans | Sada...

IMF: Egypt, Jordan, and Morocco Implemented Comprehensive Subsidy Reform Plans | Sada Elbalad

Sun 11 Feb 2024 | 09:48 PM

Taarek Refaat

Executive Director of the International Monetary Fund (IMF) Kristalina Georgieva said that Egypt, Jordan, and Morocco have succeeded in implementing comprehensive plans to reform the subsidy files, which were characterized by directing greater attention to the groups most in need.

Georgieva added – in a speech before the World Governments Summit in Dubai – that the gradual elimination of direct energy subsidies could save $336 billion for countries in the Middle East region, including oil-exporting countries, in addition to helping to achieve financial savings, reduce pollution, and help improve social spending.

She indicated that the Fund has granted about $64 billion in liquidity and reserves to the Middle East and North Africa region since the start of the (Covid-19) pandemic, including $8 billion last year, and $1.6 billion from the Resilience and Sustainability Fund to help Morocco and Mauritania transition to greener economies.

On the other hand, Georgieva called for improving the performance of institutions and bodies owned by Arab countries whose assets exceed between 50% and 100% of the gross domestic product in some countries. She also called for increasing revenue collection through policies and tax revenues, pointing out that many countries have improved Value added tax systems.

The Executive Director of the International Monetary Fund noted that 11 Arab countries have joined the global agreement for minimum taxes on companies, and renewed the Fund’s expectations that the GDP growth in the Middle East will decline to 2.9% in 2024, due to short-term reductions in oil production by some oil-exporting countries, and the war on oil production. Gaza, and the tight monetary policies, which are still needed, she said.

It expected that the decline in demand for oil will become an increasing challenge in the medium term, while high levels of debt and borrowing, and limited access to external financing, represent an obstacle to the economies of some Arab energy-importing countries.