(MENAFN - Arab News) Saudi Arabia said yesterday it would honor a pledge of 3.75 billion in aid to Egypt after complaints by the Egyptian premier that donor countries were failing to respect their commitments.
"The Kingdom pledged to support Egypt in meeting the challenges facing its economy through a series of financial commitments totaling 3.75 billion," Foreign Minister Prince Saud Al-Faisal told the Saudi Press Agency.
Responding to remarks by Prime Minister Kamal Ganzuri on donor states' failure to honor their pledges to support Egypt's ailing economy, Prince Saud said Riyadh paid 500 million of its total commitment into Cairo's Central Bank in May last year when the aid was promised.
A second tranche of 1.45 billion, to finance a number of projects by the Saudi Development Fund, was the subject of a memorandum of understanding still awaiting the go-ahead from Egypt, he added.
The rest of the Saudi aid, including another transfer to the Central Bank and the purchase of treasury bonds, had also been held up by the Egyptian government, Prince Saud said.
Saudi Arabia has, in addition, supplied Egypt with 48,000 tons of liquefied gas and "will not hesitate to stand beside its Egyptian brothers," he added.
Last week, the International Monetary Fund described the plight of Egypt's once-growing economy as dire, sounding the alarm on stagnant growth and a precipitous drop in the country's foreign reserves.
Also in February, international ratings agency Standard & Poor's downgraded Egypt for the second time since November over concerns about political instability and plunging currency reserves.
The Arab world's most populous nation is facing a budget deficit of 144 billion Egyptian pounds (about 24 billion) which analysts expect to deepen as the country continues to feel the aftershocks of an uprising last year that overthrew President Hosni Mubarak.
Egyptian state media recently quoted Finance Minister Mumtaz Al-Said as saying his government would sign a memorandum of understanding with the IMF in March for a previously spurned 3.2 billion loan.
Field Marshal Mohamed Hussein Tantawi, head of the ruling military council, announced last May that Custodian of the Two Holy Mosques King Abdullah had promised a financial aid of 4 billion in the form of soft loans, deposits and grants.
The Egyptian leader highlighted the historic ties between the two Arab countries and commended the Kingdom for standing by his country during "these trying times," the SPA said.
Cairo has been asking donors and the IMF to help bridge a funding gap through mid-2012 estimated at between 10 billion and 12 billion in the wake of the mass protests that ousted Mubarak on Feb. 11, 2011.
The mass circulation Al-Ahram daily quoted financial sources in Cairo as saying the Saudi package would support Egypt's general budget, the central bank, development and other projects and bond purchases.