Egypt’s Finance Ministry has signed a total of 35 agreements with Egyptian export companies to settle their export subsidy arrears, according to Minister of Finance Mohamed Maait.
The dues, which were provided from the Export Development Fund (EDF), were in line with previous presidential mandates to ensure export companies have enough liquidity, especially during the novel coronavirus (COVID-19) crisis.
Maait explained that a first tranche of about EGP 400m will be paid to the companies during the next month. This will raise the number of exporting companies, with whom settlement agreements were signed between early December 2019 and early September 2020, to 153. The total dues at the EDF amount to EGP 12bn during this period, divided over five equal tranches.
The initiative seeks to help export companies expand their activities and create new jobs, while fully adhering to all precautionary measures.
The minister pointed out that the Egyptian authorities are committed to paying late export subsidy dues. The authorities have made tangible progress in this regard, with fruitful cooperation between the Ministry of Finance and Ministry of Trade and Industry.
Maait explained that EGP 7bn has been allocated as part of the current fiscal year (FY) 2020/21 budget to support exports. This will ensure that funds will continue to be made available every month to the EDF, for it to pay the dues owed to exporters.
The fund will do this by completing the initiatives approved by Prime Minister Mostafa Madbouly and a joint team from the concerned ministries. About EGP 1.1bn has already been spent during July and August to support Egyptian exports.
Maait stressed that export subsidies encourage industry, stimulate production, and maximise production capabilities. It will also encourage the expansion of Egypt’s export base in a way that helps push the economy, raise growth rates, and create new job opportunities.
Nevine Mansour, adviser to the Deputy Minister of Finance, indicated that settling export subsidy arrears is a high priority for the government.