(Bloomberg) --
Egypt passed new rules aimed at curbing state spending, including halting costly new projects, as the North African nation struggles with its worst foreign-currency squeeze in years.
The measures, detailed in the government’s official gazette, include stopping spending on new projects that need US dollars and the requirement that state entities get approval from the Finance Ministry and central bank before allocating foreign currency.
The steps come as Egypt, one of the world’s largest wheat importers, grapples with a shortage in foreign funding in the aftermath of Russia’s invasion of Ukraine. Authorities have devalued the Egyptian pound three times in the past year, eventually securing a $3 billion International Monetary Fund loan program. Allies in the Gulf have also pledged some $20 billion in deposits and investments.
The government decree didn’t give further details on what projects might be affected. In recent years, Egyptian authorities have spent significant sums on new roads, bridges, cities and other infrastructure they say are key drivers for economic growth. Those projects have been criticized by some, who say the country of more than 104 million people needs greater investment in sectors like health and education.
Read also: Egypt Pound Plunges in Third Devaluation in Less Than Year (1)
The decree also restricts officials from the government and state agencies from non-essential travel without prior approval from the prime minister. It exempts officials from the health sector and state agencies that procure vital commodities as well as the defense and interior ministries.
--With assistance from Mirette Magdy.
©2023 Bloomberg L.P.
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