Letter of credit system for imports to be canceled within 2 months: Egypt PM

MENA , Tuesday 25 Oct 2022

The letters of credit system for imports will be cancelled within two months in coordination with the Central Bank of Egypt (CBE), the Egyptian prime minister said, adding that the national strategy for the Egyptian industry will be launched within three months at maximum.

Mostafa Madbouly
Egyptian Prime Minister Mostafa Madbouly speaks during the final day of the Egypt s Economic Conference 2022 on Tuesday 25 October, 2022. Photo courtesy of Egyptian cabinet Facebook page.


PM Mostafa Madbouly made the remarks during the closing session of Egypt's Economic Conference 2022.

In February, the CBE issued new rules obliging all importers to use letters of credit to finance their imports, eliminating the earlier collections system that was in force for many years. It excluded foreign companies and subsidiaries from the rules.

The new rule raised objections from importers who said it would harm their supply chain and increase production costs, leading to higher inflation. They also said that the new system would take more time and put capital on hold.

Madbouly noted that the government will implement a set of procedures in the short term to tackle the most important obstacles that various sectors face and develop immediate solutions for them, clarifying that among these procedures is adopting a package of investment incentives for strategic industries.

The procedures include holding an annual economic conference to promote investment in Egypt, through which international companies will be invited to show the investment opportunities and evaluate the agreed upon roadmap, the prime minister said.

Madbouly revealed that the first conference will be in the first half of 2023.

Moreover, a social package will be prepared in the coming period in light of the increasing rates of inflation to be implemented by November, the premier added.

He pointed to the Cabinet's decision that government bodies should not impose any fees without the Cabinet's approval.

He asserted the government's commitment to competitive neutrality in accordance with international best practices.

Madbouly said the final formulation of the State Ownership Policy Document will be scrutinized to be submitted before the Cabinet within weeks to be approved by the president.

The government aims to maximise the return on state-owned assets through successful partnerships with the private sector in a large number of priority areas, through multiple partnership mechanisms, he added.

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