Osama El-Shahed, a member of the Federation of Egyptian Industries, has stated that the past months witnessed difficulties in importing raw materials and manufacturing components as a result of difficulties in securing foreign currency. This led to a decline in production at rates ranging between 30-40% in some sectors, which was reflected in the decrease of Egyptian non-oil commodity exports by about 17% to $16bn during the first six months of this year, compared to $19.3bn in the same period last year.
He added that the drop of non-oil exports this year, after the positive growth it achieved last year, carries serious indications of the extent of commitment to the plan to double Egyptian exports to reach the strategic targets estimated at about $100bn annually.
El-Shahed highlighted that export is one of the main sources of foreign currency resources and therefore it must be among the priorities of the government and banking system to facilitate the import of production raw materials and the speedy customs release.
He further noted that any shortage that might occur in raw materials would prevent exporting factories from fulfilling their contractual obligations with foreign buyers, which could cause companies to lose many markets .Meanwhile, returning to those markets again will be difficult. Moreover, negative impact on the local market of a shortage in supply, accompanied by a rise in prices and increases in inflation.
He called for accelerating implementing the plan to deepen local manufacturing and to grant encouraging incentives for the manufacture of imported components locally, provided that no import restrictions are placed on those components until after the actual production of new factories begins and to ensure quality and price to maintain the competitiveness of final products in foreign markets.
Policies of limiting imports in their absolute, without in-depth studies, will not achieve the desired goal in controlling the trade balance, but rather will hinder export boost due to the difficulty in obtaining raw materials necessary to increase production and double exports, he disclosed.
Accordingly, it is important for the government to provide production raw materials and intermediate commodities for local factories to continue operating at their full production capacities to meet local market needs and export abroad, he concluded.
