Egypt is edging closer to finalising talks with the International Monetary Fund (IMF) for a three-year loan programme as Cairo looks to rebuild an economy battered by years of political instability and resultant violence.

The central bank governor and the country’s finance minister will finalise negotiations with the Washington-based IMF delegation, which will arrive in Cairo within the next few days, the Egyptian cabinet was quoted as saying by news agency Bloomberg.

Egypt is targeting $7bn annually over three years. It plans to secure $12bn from the IMF, while the rest would come from bilateral accords and international institutions, according to deputy finance minister Ahmed Kouchouk. This includes $3bn and $1.5bn facilities from the World Bank and African Development Bank, respectively.

The IMF visit will start on July 30, and is expected to last about two weeks, Masood Ahmed, director of the Middle East and Central Asia Department at the IMF, has said. Successive governments in Egypt have sought to secure IMF financing, but the country over the last few years has mostly been supported by Arab allies, including Saudi Arabia and the UAE, who have stepped in to plug the country’s funding gap.

Egypt is facing foreign currency shortage that has hampered economic growth and has given rise to speculation of further devaluation, or even flotation, of the pound.

Foreign reserves have plummeted as investors and tourists shunned the country following the 2011 popular uprising that saw the ouster of then President Hosni Mubarak. 

The country’s tourism sector in particular was heavily affected by the downing of a Russian passenger flight in October last year. The number of foreign tourists visiting Egypt in the first quarter of 2016 fell 40 per cent compared with the same period in 2015.

Egypt’s real GDP is forecast to expand by 3.3 per cent in 2016 despite 4.2 per cent growth in 2015, according to the IMF’s 2016 World Economic Outlook.

Since removing his Islamist predecessor in an army takeover and becoming president, Abdel-Fattah El-Sisi has pushed through controversial measures, including cuts in fuel and electricity subsidies, which the previous governments avoided. Lawmakers are discussing the introduction of value-added taxation to increase revenues and cut the budget deficit, which reached 11.5 per cent of economic output in the last fiscal year.