Macro-Economic Stabilization and Reform (MESR) Activity Year One 1st Quarterly Report

The activity aims to improve the process of capital expenditure planning, control, and monitoring, as well as upgrade the effectiveness of public financial management. MESR also seeks to develop skills for expanding public-private dialogue to promote better policy and regulatory reforms addressing macroeconomic imbalances. During the first six months of the project, the MESR team established a permanent project office space, staffed nearly all essential long-term positions, and commenced several key project activities. The team conducted various meetings with MPMAR representatives to assess the capacity of MPMAR for public investment projects and identify gaps for improvement. MESR will develop a plan for upgrading the M&E system and training of relevant staff in GOE entities on the proposed system. The MOF did not initiate any activities with MESR before issuance of the project's GOE-issued security clearance, which took place in September 2018, causing a delay in implementation of activities. However, the MOF Vice Minister met with the MESR team during the reporting period and discussed in detail the ministry's proposed areas of support with MESR project leadership. The USAID Macro-Economic Stabilization and Reform (MESR) project aims to support macroeconomic stability through human capacity building and institutional development for the Ministry of Finance (MOF) and Ministry of Planning, Monitoring and Administrative Reform (MPMAR). The International Monetary Fund's (IMF) loan arrangement under its Extended Fund Facility (EFF) supports the economic reform program agreed upon with the GOE and sets specific conditionalities for overcoming Egypt's structural and policy-driven economic problems. The IMF praised the progress Egypt made in its economic reforms program and use of the $12 billion loan, noting that strong program implementation and positive performance have been instrumental in achieving macroeconomic stability. The reform program has contributed to accelerating growth rates, reducing inflation, decreasing unemployment indices, and narrowing both external and fiscal deficits. Objective One under the MESR activity aims at improving public investment planning, monitoring, and evaluation, as well as improving coordination between MPMAR and MOF. The Team Lead of Objective One has not yet been identified, and in the meantime, the MESR Senior Advisor has taken the lead in managing and coordinating project activities under Objective One over the past six months. Three staff members under Objective One joined the MESR team in September 2018, and initial activities are underway.