CAIRO - Minister of Industry and Foreign Trade Mahmoud Issa unveiled a full-fledged plan to get the economy back on its feet and push growth, especially in the manufacturing sector and exports. "The plan includes the reopening of 1,570 factories that were shut down, while an agreement with the Governor of the Central Bank of Egypt [CBE] and other banking figures has been made to reschedule debts of these plants," he explained. The Minister also said the plan will focus on boosting small-and medium-scale enterprises (SMEs) and providing them with adequate financing. He pointed out that SMEs should be linked to giant industries as feeders. As for foreign direct investment (FDI), which has taken a knocking due to political unrest and lack of security, Issa said the plan will encourage investors and help restore confidence in the Egyptian market. He stressed that his Ministry is seeking an increase of 25-30 per cent in exports year-on-year, through a raft of new measures to bolster production standards. The country's balance of payments posted a deficit of $2.4 billion in the first quarter of fiscal year 2011/2012, according to the CBE. "The balance of trade was also in the red at $7.8 billion in the same period, due to a 10.2 per cent rise in merchandise imports to $14.6 billion," the CBE said. But there is a need to merge the informal sectors into Egypt's mainstream economy, experts say, as these sectors have created thousands of jobs over the past three decades. The informal economy accounts for around 30 per cent of Egypt's GDP, according to official reports. "Reducing the size of the informal economy requires launching development projects in shantytowns across the country and boosting growth in rural regions," said Samir Radwan, former minister of finance. Meanwhile, Minister of Finance Mumtaz el-Saeed yesterday denied that the government has raised its budget deficit forecast for this fiscal year to LE150 billion ($25 billion). Recent reform measures taken by the government to get the deficit under control have succeeded, he said in a statement on his Ministry's website. The deficit was not expected to exceed LE144 billion ($24 billion), and not reach LE150 million as mentioned by some media, he said. Deputy Finance Minister Abdel-Aziz Tantawi was quoted on Monday as saying that the government has raised its deficit forecast to LE150 billion from an initial LE134 billion. "This is due to measures taken by the government to satisfy the demands of labour groups and expenses related to elections," the official Middle East News Agency (MENA) quoted Tantawi as telling Parliament's Planning and Budget Committee. The most populous Arab country, struggling to stave off a fiscal crisis following more than a year of political and economic turmoil, is seeking a $3.2 billion loan from the International Monetary Fund. The government made the lower forecast, equivalent to about 8.7 per cent of gross domestic product, when it originally drew up its budget for the financial year that began on July 1, 2011. Saeed in his statement said the Ministry is closely watching government expenditures and is working to find new sources of revenue, including better collection of taxes.
