Mohamed Maait, Minister of Finance, has said that the government will continue to support the productive sectors in the new budget, despite the harsh global economic challenges, by providing EGP 150bn in soft financing at 11% interest for agricultural and industrial production activities, of which EGP 140bn for financing working capital and EGP 10bn to buy machinery, equipment, or production lines over a period of five years, as the state treasury bears more than EGP 13bn worth of interest rate difference annually.
Maait added, in a statement on Sunday, that the government continues to implement this initiative in the current fiscal year as well, despite the 2% hike in interest rates, which contributes to encouraging investors to expand production, and achieving the strategic goals of the state by maximizing our production capabilities, meeting the needs of domestic demand, and limiting production. From importing, expanding the export base, and enhancing the competitive strength of Egyptian products in global markets, leading to the dream of $100bn in exports, in a way that helps strengthen the structure of the national economy, sustain growth rates, continue the rotation of the wheel of production, and provide more productive job opportunities.
He pointed out that the successive global crises have proven the correctness of the Egyptian vision in intensifying efforts to stimulate productive and export activities, starting with providing advanced infrastructure capable of absorbing investment expansions, even tax and customs incentives, and credit facilities, as the Coronavirus pandemic and the war in Europe led to disruption in supply chains, and hence the rise in the prices of goods and services, and there is no alternative to enhancing the contributions of industrial and agricultural production to the structure of economic growth.
He explained that EGP 28.1bn has been allocated in the new budget to support exporting companies, with the government’s intention, starting from the next fiscal year, to disburse export support in the same year of export in a way that helps provide the necessary cash liquidity to stimulate production, as an extension of the great efforts stimulating the export sector, which were reflected in several initiatives launched by the government during the period from October 2019 until now, to respond to the delayed export burdens with the Export Development Fund, and EGP 48bn were spent in support of 2500 exporting company.
The Minister of Finance affirmed the government’s keenness to expand the base of beneficiaries of the initiative to support the productive sectors, industry and agriculture, by setting a maximum of EGP 75m for financing one company, and EGP 112.5m for multilateral entities.
He said that this initiative applies to new and renewable energy activities, free zone factories and agricultural cooperative societies, and it is prohibited to use these granted credit facilities to pay off any debts owed to the banking sector, in order to ensure the achievement of the desired goals so that this initiative contributes effectively to advancing agricultural and industrial production, in a manner It is reflected in enabling the state to cover our needs with domestic production and export surpluses abroad.
Maait indicated that the state’s public treasury bears EGP 5bn worth of real estate tax on the industrial and productive sectors for a period of three years, and also bears EGP 6bn annually to subsidize electricity for industry, and the development fee and customs tax on importing mobile components will be abolished to encourage the mobile phone industry in Egypt.