Egypt’s cabinet has approved the issuance of a $3bn to $5bn Eurobond, a government official has told Reuters.

The issuance will initially target $3bn, but can be increased in size depending on investor appetite.

Cairo also began discussions with the IMF for a $12bn loan in July. Egypt is hoping to borrow $21bn in total, with other tranches from the African Development Bank and the World Bank.

The Egyptian economy has struggled in 2016, due to a collapse in tourism and a foreign currency crisis. The Emirates NBD purchasing managers’ index (PMI) has been in contraction since October as companies are forced to cut staff and new orders, hitting export values.

Egypt now needs to plug a current account deficit of 5.3 per cent of GDP and a fiscal deficit of 11.1 per cent of GDP in 2016, according to IMF figures.

Part of the reform programme includes the introduction of VAT and the privatisation of profitable state-owned companies.

Egyptian press has reported that the Egyptian government is studying 17 or 18 state-owned companies which it could float on the Egyptian stock exchange. They are thought to include banks, petroleum and petrochemicals companies and electricity companies.

The state-owned National Investment Bank subsidiary NI Capital is coordinating the preparation of the entities for possible initial public offerings.