Parliament summons cabinet to address dollar crisis, stalled factories, organisational structure

Abdel Razek Al-Shuwekhi
3 Min Read
Prime Minister Sherif Ismail delivered a speech before the house of representatives on Tuesday Ahmed Al-Malky

Egypt’s parliament has summoned Minister of Public Business Sector Ashraf Al-Sharqawy and Minister of Trade and Industry Tarek Qabil to discuss several economic issues in a meeting to be held next week, according to parliamentary sources.

Qabil, Al-Sharqawy, and members of parliament are expected to address the work stoppage at several Egyptian factories, the provision of foreign currency holdings to factories, and plans to restructure factories’ organisational structure.

The sources told Daily News Egypt that the parliament’s meeting with the two ministers will be preceded by a meeting with the governor of the Central Bank of Egypt (CBE), Tarek Amer, on Monday in order to discuss allocating a certain percentage of foreign currency holdings to the purchase of industrial materials.

Last week, parliament’s Industry Committee met with vice governor of the CBE, Gamal Negm, to discuss the erosion of foreign currency reserves and how factories are hindered from buying required materials for the production process.

“The committee will request the provision of 20% to 30% of the dollar surplus every month to the industrial sector,” the sources said.

At the beginning of May, the CBE announced that foreign currency reserves had increased by $451m in April, reaching $17.01bn.

The Industry Committee chairperson Mohamed Saad Badrawi said that the industrial sector cannot secure its dollar requirements from the informal market as it would drive the exchange rate up to well above EGP 11. Such an increase would make it very difficult to buy the necessary raw materials for the production process.

The Industry Committee in parliament will issue a statement on Sunday urging the government to accelerate the formation of a management board for the EGP 150m fund to support factories.

The committee said it met with the Industrial Modernisation Centre’s (IMC) executive director Ahmed Taha to receive the list of  871 factories, 41 of which are ready to receive loans to resume work.

Ayaady for Investment and Agriculture Development will contribute EGP 20m to finance the recommencement of factory work. The Tahya Misr Fund will contribute EGP 70m and the IMC will contribute EGP 30m. The National Investment Bank will contribute EGP 30m.

Al-Sharqawy will prepare a portfolio nominating six companies to be listed on the stock market. In addition, the ministry is expected to call for amendments to some provisions of the law governing the private business sector in preparation for listing these companies on the Egyptian Exchange (EGX).

The commission will also meet with Holding Company for Spinning and Weaving (HCSW) chairperson Ahmed Mustafa who will present the company’s ongoing restructuring plan which is being implemented in cooperation with the American Warner Office.

The HCSW posted financial losses of EGP 2.2bn during fiscal year 2015/2016 and about EGP 30bn of deferred losses.


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