Egypt’s Minister of Finance Mohamed Maait announced that his ministry will start, as of November, to receive requests from investors for lump-sum payment of their export subsidy dues, provided by the Export Development Fund (EDF).
Under this initiative, exporters can receive their subsidy dues in full, instead of several instalments over four or five years, before the end of next December, provided that a 15% of the sum will be cut.
The initiative has been designed to provide exporters with cash liquidity required to fulfil their obligations and preserve employment.
In a statement on Wednesday, Maait said the initiative is being implemented in cooperation with Egypt’s banking sector, to provide these late dues to the exporting companies wishing to obtain them immediately at a rate of 85%. The Ministry of Finance will pay the total of these amounts, and their interest over three years to the banks participating in this initiative.
Ahmed Kochouk, Deputy Minister for Financial Policies and Institutional Development, said that in the event an export company wishes to benefit from the new initiative, it should submit an application to the Ministry of Finance.
The ministry will then grant its approval to a final settlement of subsidy dues based on the completed documents provided to the EDF until the end of June 2020.
Nevine Mansour, Advisor to the Deputy Minister for Financial Policies and Institutional Development, said the initiative is optional. It comes in addition to the five initiatives approved by the Egyptian Cabinet in October 2019, to settle the outstanding dues of exporters with the Export Development Fund until the end of June 2019.
These include: the payment of total dues by small investors; up to a maximum of EGP 5m, the payment of 30% of the dues to exporters; a set-off between the due export burdens and the tax and customs obligations; and the investment initiative to pay all dues over four or five years in return for investment expansions, in addition to the land allocation initiative.
She said that 2,351 exporting companies have benefited from the “small exporters” initiative, the 30% initiative, and the new programme, with funds worth EGP 3bn. Meanwhile, 337 companies chose to settle EGP 1.2bn worth of debts in exchange for incentives, and 153 companies received part of their dues worth EGP 1.8bn to finance investments.