Egypt's government has launched the second phase of initiative supporting export companies, announcing that the registration will open as of 7 February through until the end of the month. Minister of Finance, Mohamed Maait said on Sunday that the initiative came in implementation of President Abdel-Fattah El-Sisi's directives to back the sector, adding that it aims at disbursing the export companies' arrears from the Export Development Fund (EDF) before the end of the current FY2020/2021 (ending in June).
The initiative's second phase will be executed with the same conditions of the first phase, according to Maait.
He added that this initiative contributes in providing cash liquidity that enables export companies to meet their financial obligations, keep their labour force and boost the competitiveness of Egyptian products in international markets, especially with the severe impacts that hit the sector due to the COVID-19 crisis.
In September, Egypt's government launched the first phase of the initiative that targeted instant and cash repayment of the entirety of export companies' arrears from the EDF before the end of 2020 at a repay acceleration discount of 15 percent.
1069 export companies benefitted from the first phase, with total disbursements of EGP 13.5 billion, according to the minister.
The initiative is implemented in collaboration with the banking system, as the finance ministry deposits a guarantee at the Central Bank of Egypt (CBE) to allow for the payment of the arrears for the companies that are willing to pay their entire dues, according to minister.
This will be allowed for the companies that will subscribe to the initiative before the end of February, end of April and the end of June, said Maait.
He added that the finance ministry will repay these sums and their proceeds to the banks that contributed to the initiative over three years.
The minister revealed that the government disbursed EGP 21 billion over a year in order to support the exports sector through six initiatives.
2500 export companies benefitted from the other five initiatives with a total of EGP 5.6 billion disbursed for the exports during FY2019/2020 as well as EGP 2.4 billion disbursed from July to November 2020.
The cabinet has approved five initiatives since October 2019 that aimed to settle the exporters' arrears through June 2019.
The initiatives included the repayment of small investors with a maximum of EGP 5 million, the repayment of 30 percent of the whole arrears to the exporters, holding a set-off between the exporters' arrears and the payable tax and custom obligations on them, the repayment of the total arrear sums over four to five years while expanding their investments in return, in addition to the land allocation initiative.
