Egypt able to meet its financial obligations: PM

Ahram Online , Saturday 29 Apr 2023

Prime Minister Mostafa Madbouly said on Saturday that Egypt’s economy is “doing well” amid the global crises and is capable of fulfilling its financial obligations.

Egypt s Prime Minister Mostafa Madbouly.
Egypt's Prime Minister Mostafa Madbouly inspects industrial projects in the 10th of Ramadan City, 29 April 2023. Cabinet


“The state did not and will not fail to fulfil its obligations. We know our obligations and how to pay them,” Madbouly stressed in a press conference after touring several industrial projects in the 10th of Ramadan and New Obour cities.

“There is full coordination and commitment by the state to pay its obligations,” Madbouly said, affirming that Egypt has already paid all its previous dues.

Over the past months, the government has been keen to reassure its population amid the global crisis that raised speculations about the country’s ability to withstand the economic pressures and pay its financial obligations amid a shortage in foreign currency.

Egypt is stepping up efforts to fulfil its commitments to the International Monetary Fund (IMF) after it obtained the first $347 million tranche of a new $3 billion loan from the Fund in December.

The programme’s first review, which sets the stage for Egypt to receive the second tranche, was scheduled on 15 March. However, the review was postponed because the Egyptian side has yet to meet some of the obligations agreed upon.

Boosting exports

During his tour, Madbouly said the state has prioritised boosting exports and encouraging investment as part of the country’s national security.

Starting in July, the system of supporting Egyptian exports will be fully automated, Madbouly announced during the press conference, saving exporters time.

He added that exporters will receive their dues in a maximum of three months so that they can benefit from these resources during the same fiscal year.

Madbouly also shed light on the export-rebates programme that aims to boost exports, saying it will extend for three years from the start of FY2023/2024 in July.

In the first year of the programme, the state will support exports by EGP 30 billion, up from EGP 8 billion in the current fiscal year, despite the global crisis, Madbouly said.

The cabinet has also approved the sixth phase of the cash repayment initiative to support exporters with a value of EGP 10 billion for the shipments released by the investors until 31 December last year, Madbouly added.

Also, the state has issued 13 golden licenses for investors to encourage private investments and is about to finish examining 45 other requests for the license, Madbouly said.

The golden license, issued by President Abdel-Fattah El-Sisi last year, grants investors approval to buy/rent land and operate projects without having to secure prior permission from multiple government bodies.

Madbouly stressed that the Egyptian state relies on the private sector to lead the economy.

Reducing unemployment

He also spoke about the state’s infrastructure projects that aim to secure millions of job opportunities for the youth and reduce unemployment, adding that the unemployment rate in Egypt stands at 7.2 percent.

The state has been significantly involved in investments and projects to curb unemployment, which amounted to 13 percent in 2013 and could have reached 20 percent today if the state had not intervened.

Supporting farmers

The premier also shed light on the state’s efforts to back the agricultural sector and farmers, including by upping the price of local procurement in the 2023 harvest season to EGP 1,500 per ardeb of wheat, up from EGP 1,000 last year.

The state has allocated EGP 45 billion to buy wheat from farmers, Madbouly said.

Since the Ukraine crisis broke out in February 2022, Egypt has raised the local price several times to encourage farmers to supply wheat to the government in order to meet the citizens’ demand for bread.

Egypt, the world’s top wheat importer, has also been diversifying its wheat import sources since the war broke out, as the country used to rely on both Ukraine and Russia for 80 percent of its wheat imports.

Despite the crisis, the cabinet repeatedly stressed that it would continue subsidising the bread for citizens, a position Madbouly reaffirmed during today’s press conference.

Over decades, the state has continued to provide subsidised bread to citizens for five piastres despite the hike in wheat prices.

Egypt consumes 270 million bread loaves on a daily basis and almost 100 billion loaves annually, according to official remarks last year.

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