Egypt increases exports support fund by 92%

The decision will contribute to increasing Egyptian products' opportunities to compete in global markets and open new export markets

The Ministerial Economic Committee agreed to increase the amount allocated to supporting Egyptian exports to EGP 5bn on Monday.
During a committee meeting, headed by Prime Minister Ibrahim Mehleb, the ministers agreed to increase the amount from EGP 2.6bn to EGP 5bn in the new state budget, representing an increase rate of 92%.
Non-oil exports decreased to $8bn in May 2015 instead of $10bn in May 2014, with a decrease rate of 20%.
The committee said the increase will contribute to increasing opportunities for Egyptian products to compete in global markets and open new export markets. In addition, it will provide many job opportunities for youth in various sectors.
Former head of the Textile Export Council Magdi Tolba said that the issue of supporting the exports is not only by money but also it is important to solve the problems and other obstacles of exporting.
Tolba added that it is more important to resolve the problems of transportation, customs, tariff and valid places to store products before increasing the money allocated for exports support.
"We don't need money to put in our pockets, but we need decisive solutions for exporting problems," he said.
The Federation of Egyptian Industries (FEI) Chairman Mohammed 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.
Al-Suwaidi explained that this could be achieved through allocating a rate of the funds gathered from energy reduction (25%) for four years to reduce the burden of some products through exportation.
Al-Suwaidi noted that increasing export funding targets compensating companies for reduction in energy subsidies, which led to increased prices of electricity and gas to the factories.
He added that the factories and companies witnessed a significant decline in exports during the first quarter of the current year.
Mehleb issued a decision in July 2014 to decrease the fund allocated for supporting exports to EGP 2.6bn in the current FY, instead of EGP 3.1bn in FY 2013/2014.
However, the government agreed on increasing the funds allocated to supporting export without applying the criteria of distributing the money to exporters and companies. The prime minister signed new criteria to pay the dues of exporters in the sectors benefiting of exports support programme, which will be activated in 2017.
On the other hand, the government did not indicate in its decision the source of increased fund in the new budget.
Further, the minister of finance announced the allocation of EGP 61bn for energy subsidies in FY 2015/2016, instead of EGP 70bn in the current FY 2014/2015.
The committee meeting was held in the presence of the Governor of the Central Bank of Egypt (CBE) and the ministers of Industry and Foreign Trade, Planning, Supply, Electricity, Finance, International Cooperation, Transport, and Investment.