CAIRO, July 16 (Reuters): Western consultants helping Egypt compile an economic reform plan say it needs at least $60 billion of investment to reach average gross domestic product (GDP) growth of 5.0 per cent by 2018 and the same amount again to bolster its foreign reserves, senior officials said.
The Egyptian officials said the country would seek dollar-denominated investments and loans from local and foreign investors, foreign governments and international lenders to fill the gap at a donor conference slated for the end of the year in Egypt.
The International Monetary Fund (IMF) is expected to attend the conference and has discussed the possibility of extending a loan to Egypt, one official said.
"The prescription which Lazard put forward is not very different from the prescriptions of the IMF", said another official, which would suggest a deal could be reached quickly.
The officials, who requested anonymity due to the confidential nature of the plan, spoke to Aswat Masriya, a news website run by the Reuters Foundation which promotes independent journalism in Egypt.
The news agency reported last month that international investment bank Lazard and US consultancy Strategy& were drawing up plans to reshape Egypt's economy that could be used as the basis for reopening talks on a loan agreement with the IMF.
Such a deal could help kindle confidence among foreign investors who have been unnerved by three years of turmoil and a host of other problems including costly energy subsidies and a lack of transparency in economic management.
The IMF was not available for comment. It has previously said it was open and eager to restart loan negotiations which ousted Islamist President Mohamed Mursi, who was unwilling to impose unpopular reforms, had failed to conclude.
Just a month into office, President Abdel Fattah al-Sisi's government has enacted a series of subsidy cuts and tax hikes resembling IMF-type austerity measures which the officials said were part of the consultants' plan.
The IMF has discussed the loan with officials from the United Arab Emirates, a top Egyptian businessman familiar with the situation said.
He said the UAE - the driving force behind the consulting project - had also sought advice on the economic reform plan from former PIMCO chief executive officer Mohamed El-Erian, who have made recent trips to both countries. El-Erian declined to comment.
Asked about al-Erian, a source in the UAE familiar with the matter said: "He is one among many experts and organisations who are advising on a number of ideas and best practices under discussion."
