A group of investors intend to present a memorandum to the industrial and planning and budget committees of the House of Representatives to demand the government pay its arrears for export subsidies amounting to EGP 7.247bn, an investor in the food sector said.
The investor, who spoke on the condition of anonymity, added that the food companies’ share of total export subsidy arrears amounted to about EGP 1.5bn.
The government increased export subsidies in the next fiscal year draft budget by EGP 1.4bn to reach EGP 4bn, up from EGP 2.6bn in fiscal year (FY) 2017/2018.
The economic committee of parliament last week held a meeting with the Exports Development Fund, affiliated with the Ministry of Trade and Industry, to discuss financial allocations in the next draft budget.
The fund urged the need to pay the export subsidy arrears to increase the competitiveness of Egyptian companies in foreign markets, especially since many countries provide such export advantages to their investors.
MP Amr Al-Gohary, member of the economic committee, said that the jump in the financial allocations of export subsidies in the next FY was massive compared to the current allocations.
He added that they demanded the Export Support Fund present a report of the arrears and the affected companies so that parliament can discuss the issue with the minister of finance soon. He asserted that export support should not be paid in cash, but through offering tax incentives or customs exemptions.
Egyptian non-petroleum exports last year reached EGP 21bn, an increase of 9% compared to last year.
Al-Gohary described the growth in non-petroleum exports as limited, especially after the flotation of the pound in November 2016, as it was expected to exceed the $30bn mark in the first year post-flotation.
The Ministry of Trade and Industry announced the growth of Egyptian non-petroleum exports in the first quarter of 2018 by 15%, reaching $6.324bn versus $5.52bn in the same period of last year.