Up to EGP 6bn was paid out in export subsidy arrears to 1,667 export companies for fiscal year (FY) 2019/20, according to Minister of Finance Mohamed Maait.
In a Monday statement, Maait said the state has been committed to paying export subsidies since 2012. The government has made tangible progress in this regard, with fruitful cooperation between the Ministry of Finance and the Ministry of Trade and Industry.
The dues, which were provided from the Export Development Fund (EDF), were in line with previous presidential mandates to ensure export companies have enough liquidity, especially during the novel coronavirus (COVID-19) crisis.
The export subsidies will enable target companies to pump liquidity into production and retain employment, while fully adhering to all state-implemented precautionary measures. It will also ensure the continuation of the state’s economic reforms, and improve indicators of economic performance.
Maait pointed out that more EGP 7bn has been allocated as part of the new budget for the current FY 2020/21 to support exports. The allocation will ensure that funds are provided on a monthly basis to the EDF, to pay subsidy dues to exporters.
This also comes in implementation of recent initiatives by Prime Minister Mostafa Madbouly. One of these initiatives will see the EDF pays 30% of export subsidy arrears, at a minimum of EGP 5m per company.
According to Maait, such initiatives encourage Egypt’s industry, stimulate production, maximise production capabilities, and expand exports. It also looks to raise the country’s growth rates and create new jobs.