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Thursday, 29 October 2020

Egypt's economic stimulation package meets global challenges, not the interests of manufacturing community: Manufacturers

Doaa A.Moneim , Thursday 19 Mar 2020
Factory 909 on the outskirts of Cairo. (Reuters)
Factory 909 on the outskirts of Cairo. (Reuters)
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The new measures the government has launched in the industrial sector as part of a host of measures adopted to contain the negative impact of COVID-19 on the Egyptian economy are leaving some in the manufacturing sector not utterly satisfied. A number of manufacturers told Ahram Online they are expecting more from the government in this situation.

Deputy head of Egypt’s Export Council for Ready Garments Mohamed El-Sayad said the manufacturing sector in Egypt is at a critical stage, particularly because shipping to foreign markets, including Egypt's two major market the US and Europe, has been suspended as part of the global procedures undertaken to curb the spread of the coronavirus.
Yet, as El-Sayad noted, these procedures have not met the manufacturing community's expectations, especially that it has to pay dues, including taxes, insurance, and interest on loans.

“The current situation imposes significant challenges to manufacturers and the industrious community, including hard currency shrinking in the domestic market due to the shipping suspension and the major T-bills and stock market shares selling operations by foreigners. Really, manufacturers and exporters are suffering,” according to El-Sayad.

He added that even with the new decision to disburse 10 percent of exporting support subsidies in June, "how can manufacturers and exporters manage their financial situation?"

The cabinet, as well, has not explained its plan for interest payments for the time being, especially for factories and local major companies, said El-Sayad.

He also urged concerned bodies to consider postponing collecting dues from manufacturers and exporters for two months.

Deputy President of the Federation Of Egyptian Industries (FEI) Mohamed El-Bahi said the government's package of measures complement the easing of procedures it adopted under

the economic reform programme since November 2016.
“This phase is witnessing unprecedented actions to protect businesses and the economic community as well as the gains garnered from the reform programme,” according to El-Bahi.

He asserted that businesspersons, manufacturers, exporters, and all concerned parties have to make use of such incentives to support and deepen the domestic manufacturing to be able to export to Arab and African markets which are suffering from a shortage in commodities due to travel and shipping restrictions in light of the precautionary measures adopted by those countries.

El-Bahi urged manufacturers, as well, to mass-produce to decrease the final products' cost and provide hard currency due to exporting.

Manufacturers should also expand their activities vertically, through modernising machines and bringing new ones, and horizontally, by establishing new branches for their factories and companies in domestic and global markets.

El-Sayad highlighted the small, medium, and micro-sized projects and enterprises (SMEs) as the sector to most benefit from these urgent procedures.

On Tuesday, Egypt’s cabinet approved an urgent intensified package to boost economic activities, especially in the manufacturing sector.

The procedures included decreasing natural gas prices for industries and providing EGP 1 billion for exporters as part of a package of measures aimed at supporting the industrial sector and the economy in the wake of the coronavirus outbreak.

In addition, procedures involved decreasing natural gas prices to $4.5 per million British Thermal Units (mmBtu) for the industrial sector, lowering electricity prices by 10 piasters for heavy and average-use industries, and fixing the price of electricity for other sectors for the next three to five years.

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