Egypt’s Minister of Finance Mohamed Maait announced that the government will launch an initiative within the coming days that would allow instant cash repayment for all export rebate arrears.
The repayments will be provided by the Export Development Fund (EDF) before the end of 2020, at a discount of 15%.
Increasing exports is one of the government’s key priorities, with the Egyptian Cabinet having already approved five initiatives since October 2019 aimed at settling export rebate arrears.
The initiatives include the repayment to smaller entities with a maximum of EGP5m, repayment of 30% of the arrears to exporters, and the setting off of exporters’ arrears with tax liabilities and custom obligations.
The government has also introduced initiatives that will see the repayment of total arrears over four or five years while ensuring investments in return, and the land allocation initiative.
Export-oriented companies such as Oriental Weavers (ORWE) and Dice for Sports and Casual Wear (DSCW) are expected to benefit from the government initiative.
ORWE’s export rebates backlog stood at EGP 509m by the end of July 2020, with 62% of its products exported in 2019. DSCW’s export rebates backlog amounted to EGP 130m by the end of July 2020, with 58% of its products exported in 2019.