Egyptian PM Mostafa Madbouly. File photo
In meetings today with ministers and officials, Madbouly said priority will be given to food products, food manufacturing components, medicines, and production requirements.
Cabinet spokesman Nader Saad said in a statement that there are $9.5 billion worth of goods stuck at Egyptian ports, and that the government plans on working with the banking sector to release these goods. Saad added that $5 billion worth of goods were released from ports between 1 and 23 December.
The holy fasting month of Ramadan, which sees a hike in demand for commodities, starts on 23 March this year in Egypt based on astronomical calculations.
Madbouly said that the government is working to ensure the availability of various commodities and ensure fair pricing.
In a meeting with the PM, Minister of Agriculture El-Sayed El-Quseir said the announcement of a clear plan for clearing the goods through customs delivers a message of stability and reassurance to the market, which should achieve a balance in prices.
A plan will also be announced for releasing fodder and feed additives, El-Quseir added.
Supply Minister Ali Moselhi said goods worth $300 million, including food products, were released on Wednesday and Thursday.
Huge quantities of goods have been accumulating at Egyptian ports amid a shortage in foreign currency due to economic shocks caused by the Russia-Ukraine war.
The Central Bank of Egypt (CBE) announced in October that by December it will phase out the use of letters of credit (LCs), which the CBE has mandated since March.
The LCs aimed to alleviate the pressure on foreign currency. However, the step has caused imported goods to be blocked at ports.
Securing foreign currency
Earlier this month, Madbouly said Egypt will implement an "urgent and solid" plan in coordination with the CBE to ensure the country's foreign currency needs are met and help the economy keep moving with some flexibility amid the current global crisis.
Madbouly said the plan will run until 30 June 2023, which marks the end of fiscal year 2022/23, as well as over the medium term over the next two to three years.
However, the premier did not give further details about the plan, saying that some of the state's steps “should not be announced in advance” to avoid negative repercussions.
Tackling economic crisis
Pressure on Egypt’s economy due to the global economic crisis has caused the CBE to raise the interest rates for the fourth time by three percent (300 bps) last week.
The bank's Monetary Policy Committee raised the overnight deposit rate, overnight lending rate, and the rate of the main operation to 16.25 percent, 17.25 percent, and 16.75 percent, respectively.
Also, the country managed to obtain the approval of the International Monetary Fund (IMF) for a $3 billion 46-month loan deal in mid-December to address the harsh impacts of the war in Ukraine on the Egyptian economy.
The latest IMF deal is Egypt’s second under the EFF, the third since the onset of the war in Ukraine, the fourth since the implementation of the country's first wave of economic reforms (2016-2019), and the 12th since Egypt became a member of the IMF in 1945.
The country has also experienced skyrocketing commodity prices and a rise in core inflation, which rose to 21.5 percent year-on-year in November from 19 percent in October.
On a monthly basis, the core inflation recorded 2.7 percent in November 2022, compared to 0.5 percent in the same month of the previous year and to 2 percent in October 2022, the statement added.
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