Importers called on the Federation of Egyptian Chambers of Commerce (FEDCOC) to hold an urgent meeting to respond to the new regulations introduced by the Central Bank of Egypt (CBE) for importing operations, indicating the beginning of clashes between importers and CBE governor Tarek Amer.
The CBE issued Monday evening new regulations at banks for import operations. Importers however found these regulations to be unfavourable, describing them as damaging to the business.
According to the head of the Importers Division at the Chamber of Commerce in Cairo, Ahmed Shiha, the regulations will lead to numerous problems, most importantly the possibility of excluding complete goods from the market and driving up the price of a lot of other goods.
Shiha said, in special statements to Daily News Egypt, that the importers called for an urgent meeting for FEDCOC to discuss the consequences of these regulations on the importing business and the market in general.
“The new regulations place more burdens on the importers and significantly restrict their business. Moreover, their negative impact on the import movement will be much worse than the decision made by former CBE Governor Hisham Ramez, who put a maximum limit for deposits in foreign currency at banks,” Shiha said. These regulations are shocking for the importers and unexpected from Amer, he added.
Importers were optimistic about Amer assuming the position, and hoped he would compensate for their suffering in the era of his predecessor Ramez, he said. He nonetheless noted that he does not expect Amer to retreat from this recent decision.
Shiha further noted that importers will not resist any decisions taken by the CBE for the interest of the economy; however, their only request is that foreign liquidity is made available to allow them to import freely.
According to the Head of the General Division of Computers and Software at FEDCOC, Khalil Hasan Khalil, the new regulations introduced by the CBE will increase importers’ losses.
The importers do not have the financial capabilities to pay 100% of the imported goods’ values before importing them, especially since the period required for the goods to arrive ranges from one month to one and a half.
In the past, importers paid 20%-25% of the imported goods’ values until they received the goods, and covered their remaining values from selling the goods. With the recent economic circumstances and with the burden of import decisions taken by former CBE governor Ramez, the importing companies lost a significant part of their financial strength, which prevents adherence to the new regulations, as importers will not be able to pay the full values of imported goods up front.
Forcing manufacturers pay 50% of the raw materials and parts used in manufacturing is exaggerated, and adds more financial burdens on the manufacturer, he said. Khalil expected the execution of the new decision to decrease imports and cut short the businesses of a large number of importers, which negatively affect the market.
He further projected an increase the price of goods, such as electronic products and computers, because of the expected increase of costs and the low supply of the products compared to the demand.
Khalil warned against decision-makers treating the ICT sector as a luxury, noting that the sector is the cornerstone for economic growth, especially since ICT has become a major tool in all economic aspects, whether industrial of commercial.
“We expected the CBE to issue decisions facilitating business for the importers in light of the difficulties they have faced since February. However, we were disappointed,” he said.