Egypt has allocated EGP 7 billion in the FY2020/2021 budget for the Export Development Fund (EDF) in order to disburse exporter firms' arrears, which are to be disbursed in monthly tranches, Minister of Finance Mohamed Maait said in a statement on Monday.
Maait said that EGP 6 billion, which constitutes 30 percent of exporter firms' arrears, were disbursed from the state’s budget for the EDF in FY2019/2020 to fulfil dues for 1,677 companies and provide the needed liquidity for them amid the COVID-19 crisis.
Maait added the action came in light of President Abdel-Fattah El-Sisi’s directives to disburse the arrears.
The minister also said that the action aims at help companies keep their labour, increase productivity and improve Egypt’s economic performance signs.
“The Egyptian government has been committed to disbursing the export firms' arrears since 2012, and the government has made a tangible achievement in this regard through fruitful cooperation with the trade and industry ministry,” Maait said.
The minister added that fulfilling the exporters’ arrears will contribute to stimulating manufacturing and production, maximising productivity, and expanding the export base, by which the economic cycle can be pushed, growth rates can be increased and new job opportunities can be generated.
In May, Egypt's ministers of finance, trade and industry inked a number of settlement agreements with 41 foreign and domestic export firms to resolve the arrears meant to be disbursed to them through the EDF.
The total arrears that have been disbursed from the EDF to export firms from January to April recorded EGP 2.133 billion, according to Ministry of Trade and Industry.
Export firms have been suffering from the accumulation of their dues, which total EGP 10 billion and have not been disbursed from the EDF for three years.