The Egyptian Ministry of Finance announced the commissioning of a working group composed of representatives across several governmental institutions to draft a plan to increase exports by 10% and push the trade deficit and unemployment rate down by 1.5% annually starting in 2016, according to an official statement Saturday.
Four working groups were formed to address the government’s targeted goal. The groups are headed by Minister of Industry and Foreign Trade Tarek Qabil.
The working team includes Minister of Finance Hany Kadry Dimian, Transportation Minister Saad Al-Geioushy, representatives from the Central Bank of Egypt (CBE), and the heads of the Federation of Egyptian Chambers Of Commerce (FEDCOC) and the Federation of Egyptian Industries (FEI).
In a statement made by Qabil last month, noting the disparity in export value between the fiscal year (FY) 2014/2015 and the FY 2015/2016, he expected the measures the government will take in 2016 to ameliorate export rates.
The commission will attend to the $3.51bn disparity in non-petroleum exports – which include agricultural products, leather goods, chemicals, fertilisers, and textiles – between the period of January and November in 2014 and in 2015, where the value of exports totalled $16.76bn in 2015 and $20.27bn in 2014.
This disparity occurred despite the measures the government took to stimulate trade.
The CBE further decided to provide $4bn in stimulus funds to the industry market as a means to facilitate cash flows and bank credits needed to make industrial raw materials available for production. In a separate measure, factories were provided with the requisite energy resources to continue production.
Commenting on the disparity, Qabil said this difference does not indicate the “futility of the actions and decisions made by the government over the past two months”.
The latest figures on petroleum exports (crude oil and petroleum products) were issued by the Central Agency of Public Mobilisation and Statistics (CAPMAS) in August. The agency stated that the value of petroleum exports during August totalled $310.2m, compared to $378.1m in the preceding month.
During the first quarter (Q1) of fiscal year (FY) 2015/2016, the trade deficit recorded $10bn with neither improvements nor declines compared to the same quarter last year. The CBE attributed the inefficiency of their implement measures “to the decline in world prices of oil and other staple commodities, which had a significant bearing on Egyptian exports and imports”.
The CBE added that the retreat of the import payments by 10.4%, registering $14.6bn compared to $16.3bn, contributed to preventing the worsening of the trade deficit.
“Merchandise export proceeds decreased by 26.5%, to stand at $ 4.6bn, against US$ 6.3 billion [during the same quarter last year],” the CBE said.
Petroleum exports dropped by $ 1.2bn in oil exports despite an increase in exported quantities while non-petroleum exports recorded $3.1bn, a $487.5m decline compared to the same quarter the previous year.
The government’s working group will implement the mechanisms required to implement the one-stop shop system in ports all over the country. The new system seeks to provide one window through which exporters and importers can finalise all documentation procedures and reduce the timeframe of releasing products from ports.