Egypt is a country of priority for the International Finance Corporation's (IFC) provided finances for coronavirus-stricken economies, its country Manager in Egypt, Libya, and Yemen, Walid Labadi told Ahram on Thursday. The private sector needs the utmost support, being the backbone of Egypt's economy, Labadi said. The IFC, the investment arm of the World Bank, has allocated $8 billion of financing globally to support businesses affected by the coronavirus pandemic, especially in the tourism and manufacturing sectors, he added. The financing is part of a $14 billion relief package announced in March by the World Bank Group. Labadi said the IFC's support will focus on three areas. "First, we're providing $2 billion to support our existing clients in sectors like manufacturing, agribusiness, and healthcare. The financing will help them preserve jobs and weather the coronavirus storm. Second, we're earmarking $2 billion to encourage cross-border trade, which will keep essential goods flowing between countries. "Third, we're providing $4 billion to emerging-market banks, allowing them to ramp up lending to businesses, which need working capital to pay their bills and employees' salaries." The global economy is facing unprecedented challenges in the wake of the coronavirus outbreak, the IFC official said. "Not only is the pandemic exacting a heavy human toll, it is also creating deep uncertainty, disrupting economies around the globe on both the supply and demand sides, and sending financial markets into a tailspin." Labadi said in an interview with Ahram Online. "Many countries, including Egypt, have implemented quarantines and encouraged social distancing, which will help save lives. But at the same time, those safeguards are weighing on the global economy." "Stock markets are faltering, consumer spending is down, oil prices are plunging, and international supply chains have been severed, hampering manufacturers. The entire tourism industry has gone into hibernation. Moreover, small businesses, the backbone of most economies, are under severe stress." Asked about the IFC's estimate of the impact of coronavirus on Egypt's economy, Labadi said: "We expect the buoyant growth momentum that has been characteristic of Egypt's economy for the past two years to slow down. "We expect consumer spending to fall, along with private investment and foreign direct investment. Travel restrictions will weigh on the tourism industry, which is a huge part of Egypt's economy, and healthcare costs will rise." The IFC official said the companies of all kinds, particularly small and medium-sized enterprises, have been badly hurt due to the coronavirus outbreak. "We have seen waves of layoffs and some businesses have closed, at least temporarily." "A further risk to this outlook is a major local outbreak of the virus that will put a hold on all production activity in Egypt as factories and companies shut down, severely impacting supply levels while extending the negative impact on foreign exchange sources."
