(AFP File photo)
The Ministerial Economic Committee will acquire the declared EGP 5bn to support the exports sector as promised,announced Chairman of the Federation of Egyptian Industries (FEI), Mohammed Al-Suwaidi.
Al-Suwaidi said that, although the Ministry of Finance only approved an amount of EGP 2.6bn towards supporting the Egyptian export sector, the Ministerial Economic Committee will act towards raising the amount to reach EGP 5bn.The committee agreed to increase the amount in June.
“I don’t know how the government will acquire the necessary EGP 2.4bn so that amount can reach EGP 5bn. You can ask Ministerial Economic Committee itself,” Al-Suwaidi said.
Al-Suwaidi noted that the FEI is now preparing a plan in collaboration with the Ministry of Industry and Foreign Trade to overcome the obstacles and increase Egyptian exports abroad. The plan is based on a strategy entitled the “pound brings dollars”, meaning that the amount of EGP 5bn announced before will return more dollars and euros as hard currencies.
Meanwhile, head of Agriculture Export Council (AEC) Ali Essa said that specifying the amount of EGP 2.6bn to support exports is an incorrect decision by the Ministry of Finance because the Egyptian exports sector has a significant influence.
Essa added that the government had committed a clear mistake, because the current situation comes amidst many adverse conditions within Egyptian foreign trade. Therefore, it is necessary to increase the amount of export subsidies to EGP 5bn as promised, rather than to stabilise the amount.
Essa revealed that the export support fund was not paid the EGP 2.6bn allocation for FY 2014/2015, in addition to the arrears from FY 2013/2014, estimated at EGP 3bn.
“There will not be an increase in Egyptian exports in light of the clear government hardship, and export councils can’t do any action plans and strategies to increase exports,” Essa said. “Without agreement on currency trading methods, solutions to export and transport problems, and support for companies and exporters, the decline in exports will continue.”
He added that, in light of declines in some currencies, such as the euro and the Russian rouble, as well as the Arab regional events, the government has to double the amount of export subsidies, instead of stabilising the current amount.
For her part, Executive Director of the Engineering Export Council Laila El-Maghraby said the export councils’ plans will be significantly affected and will lead to a negative impact on exports.
El-Maghraby noted that the allocated amount of funds is used to compensate for export burdens, strengthen competition of Egyptian exports and open new markets, as well as hold exhibitions abroad.
Total Egyptian exports amounted to $8bn in May 2015, compared to $10bn in the same period last year, with a decrease of 20%, according to a report by the General Organization for Exports Imports and Control (GOEIC(.
In June, the Ministerial Economic Committee agreed to increase the amount allocated to supporting Egyptian exports from EGP 2.6bn to EGP 5bn in the new state budget, representing an increase rate of 92%.
Al-Suwaidi said that the FEI submitted a proposal to the cabinet regarding increasing the fund allocated for supporting exports to EGP 5bn in the next state budget for fiscal year (FY) 2015/2016.
