Minister of Finance Mohamed Maait
Maait’s comments came following the official launch of an initiative last month by the Central Bank of Egypt (CBE) aiming to support domestic industrial and agricultural production.
The initiative’s support includes concessional financing worth EGP 150 billion ($4.89 billion) with an interest rate of 11 percent.
It also includes EGP 140 billion ($4.57 billion) allocated to finance working capital and EGP 10 billion ($326.42 million) for the purchase of machinery, equipment and production lines over a period of five years.
In addition, more than EGP 13 billion ($424.35 million) has been dedicated annually as interest rate differentials.
The support is being provided during the current fiscal year (FY2022/2023) in spite of a recent two percent increase in interest rates, according to Sunday’s statement.
The increased production will help achieve the strategic goals of the state, including maximising production capacity, meeting domestic demand and enhancing the competitiveness of Egyptian products in global markets. The ultimate target is to reach $100 billion in exports, which will help strengthen the national economy's structure, sustain growth rates and provide more productive job opportunities.
The minister also pointed out that the successive global crises – the COVID-19 pandemic followed by the war in Ukraine – have demonstrated the value of stimulating production and exports. This begins with providing advanced infrastructure capable of accommodating expanded investment and progressing to tax and customs incentives and credit facilitation.
Maait also announced that EGP 28.1 billion ($917.25 million) has been allocated to support exporting companies, with the government planning to disburse export support starting in the next fiscal year.
Maait noted that the initiative is open to new and renewable energy activities, free zone factories, and agricultural cooperative associations. There is also EGP 75 million ($2.44 million) as a maximum limit for financing one company, while EGP 112.5 million ($3.67 million) is the maximum limit for multi-party entities. However, the financing cannot be used to repay any outstanding debts to the banking sector.
In addition, there will be EGP 5 billion ($163.21 million) allocated for property taxes for industrial and productive sectors for three years, while EGP 6 million (nearly $200,000) will be allocated to subsidise electricity for industry.
Moreover, development fee and customs taxes on mobile components imports will be removed to encourage the mobile phone industry in Egypt, Maait explained.
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