Prime Minister Mustafa Madbouli sat down with Egypt’s Export Development Committee last week to listen to their recommendations on how to achieve the target of around $115 billion in exports by 2030.
Key recommendations included providing more competitive interest rates, reducing tax and customs burdens, and accelerating the disbursement of export support.
The recommendations also included six main solutions to strengthening the export sector, including closing a customs loophole which makes it cheaper to import production inputs than to manufacture them locally.
The committee called on the government to offer competitive interest rates tied to inflation, streamline tax and customs procedures, and disburse payments under the country’s export subsidy programme more quickly. Further meetings will be held with representatives from each export sector to discuss their specific demands in detail.
The Export Development Committee is one of six advisory committees set up by Madbouli to enhance communication between the government and the private sector.
Ahmed Al-Gabbas, vice chair of the Leather Export Council, said that one of the challenges facing his line of business was the current electronic invoicing system. Leather exporters struggle to obtain electronic invoices when purchasing raw hides from tanners, which has led the council to demand either exemption from this requirement or the use of reference pricing.
Al-Gabbas said that the leather industry exports between 95 and 99 per cent of its production, and he argued that exempting tanners from electronic invoicing could help to integrate them into the formal economy. The leather industry trades between five and six million hides (raw leather) annually, valued at approximately LE3 billion. Including this sector in the formal system could increase tax revenues and ensure fair competition among producers, Al-Gabbas told Al-Ahram Weekly.
He suggested that a settlement of exporters’ taxes against their VAT refunds was essential to improving liquidity and boosting exports. He also emphasised the importance of developing Egypt’s livestock sector to support the leather industry. Global demand for Egyptian leather remains strong, yet domestic production is limited, he said, since it demanded enhanced livestock vaccination programmes, improved feeding systems, and the import of new cattle breeds to increase the availability of high-quality hides.
“Modern automated slaughterhouses are needed because they would enhance the leather’s quality and reduce wastage by up to 40 per cent,” he added.
He recommended that the government offer investment incentives to major international footwear brands, such as tax exemptions for five to 10 years, free land allocations for factories, and workforce training programmes. These measures would expand local manufacturing, boost exports, and increase foreign currency inflows, he said.
Egypt’s leather and leather product exports reached $164 million, with 60 per cent coming from raw leather exports and 40 per cent from finished leather products, including sports shoes and synthetic leather footwear, in 2024, Al-Gabbas said.
He stressed that exporting a finished product could earn Egypt 10 times what it is earning from exporting raw hides. Egypt exports leather at an average of $1.5 per square foot, while producing a pair of shoes requires two square feet of raw leather. If the shoes are manufactured in Egypt, they could be exported at more than $30 per pair, he said.
Sherif Al-Sayad, head of the Engineering Export Council, stressed the need for a clear and structured export rebate programme and the faster disbursement of exporters’ financial entitlements. The export councils have engaged consulting firms to draft a three-year plan on export incentives, he said, and this was expected to be submitted to the government after next month.
Al-Sayad also pointed to delays in customs clearances for imported production inputs, increasing manufacturing costs and reducing the competitiveness of Egyptian products in global markets. He welcomed the decision by the ministers of investment, trade, and finance to extend customs working hours, a move which is expected to reduce clearance times and enhance efficiency.
He called for rebate payments to be processed within three months at most, as exporters include these amounts in their cost structures. Additionally, he emphasised the need to rectify customs tariff distortions, where in some cases importing finished goods is cheaper than importing raw materials for local production.
Al-Sayad called upon the government to offer cheap interest rates to help exporters maintain their market competitiveness. He also called for an increase in the maximum financing limit per company, currently capped at LE140 million.
* A version of this article appears in print in the 20 March, 2025 edition of Al-Ahram Weekly
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