The influx of foreign exchange from the Ras Al-Hekma agreement and a new deal with the IMF underpinned last week’s presidential directive to release goods from Egyptian ports.
According to a cabinet statement on 4 March, President Abdel-Fattah Al-Sisi has directed the government to act swiftly to release goods stuck at ports and simplify custom clearance proceduresfollowing an injection of $35 billion from the Ras Al-Hekma deal and $8 billion from the IMF agreement.
During a tour of Alexandria port on 7 March, Prime Minister Mustafa Madbouli said goods stuck at ports hampered the supply of production inputs and had“caused the prices of several strategic food commodities to rise on the local market,negatively impacting the lives of citizens.”
Madboulisaid efforts to clear the backlog of goods will continue for several months to ensure that production lines can work at full capacity, and that priority will be given to basic commodities, food, medicines, animal feed, and production inputswhich directly support the industrial sector.The governmentalso aims to increase the availability of commodities like sugar,the supply of which has been compromised by the lack of dollars.
A total of $230.9 million worth of strategic commodities —excluding gold and oil products —and $464 million of production materials were released between 1 and 6 March, according to Madbouli.The value of released goods since the beginning of the year exceeds $13 billion.
“In the coming months, foreign reserves will be sufficient to ensure the timely provision of essential commodities and stabilise prices in the market,” said Madbouli.
To ensure the continued release of goods, Madbouli said he had instructed the Interior Ministry to act with “an iron fist”against black market traders seeking to manipulate the flow of hard currency and obstruct Egyptians working abroad from transferring remittances through legal channels.
“It is important that banks become the main gateway through which US dollars and other foreign currencies flow in and out of the country,”he said.
Providing dollars to release finished products and consumer goods will be at the bottom of the government’s list of priorities.
Cabinet spokesperson Mohamed Al-Hommosaniexpects the immediate release of goods at ports to have a positive impact on the economy and consumers by “reducing commodity prices and increasing supplies on the market”.
“The government, in collaboration with banks, will make sure that importers get the hard currency needed to release the backlog of imported goods from ports,”he said.
Customs Authority head Al-ShahatGhattourinoted that the dollar rate used in calculating customsincreased to LE49 from LE 31 one week ago.“To release goods that have been held up smoothly and easily it is essential to stabilise the exchange rate,” said Ghattouri.
He cited the shortage of animal feed as the underlying factor in recent dramatic increases in the priceof eggs, poultry, and dairy products and predicted“the immediate release of animal feed will stabilise the prices of these essential products.”
Local ports and warehouses have been dealing with a backlog of goods since 2022.“We have been trying our best to release these goods but shortage of foreign currency was a big problem,” said Ghattouri.
The economic impacts of the Russia-Ukraine war had left the government struggling to accelerate the release of goods—including basic commodities—in order to curb inflation.
Though businessmen, industrialists and importers welcomed the government measures, they complain that cumbersome bureaucratic procedures continue to slow down the release of goods.
MP and businessman Mohamed Al-Sallab, the head of parliament’s Industrial Committee, told Al-Ahram Weekly that the Industry Ministryaffiliated General Organisation for Export and Import Control (GOEIC) is not helping with the speedy release of items held up at ports.
“It is no secret that GOEIC takes a lot of time inspecting goods in labs, delays that increase costsfor importers,leading to increased prices on the local market,” said Al-Sallab.
Mohamed Al-Sewidi, head of parliament’s Energy Committee, told the Weekly that “several industrial projects were close to shutting down because of the lack of production inputs.”
Al-Sewidi hopes that “upgrading custom and inspection systems at ports will help speed up the release of all imported materials and production inputs so they can find their way into the market and help stabilise prices.”
* A version of this article appears in print in the 14 March, 2024 edition of Al-Ahram Weekly
Short link: