Egypt’s Minister of Finance Mohamed Maait has announced the Cabinet’s approval of the second phase of the of the lump-sum payment initiative of export subsidy dues owed 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.
In a statement on Sunday, Maait added that this contributes to providing cash liquidity that enables the companies of the export sector to fulfil their obligations towards their customers. It also aims to preserve employment in light of the novel coronavirus (COVID-19) pandemic.
It takes place in a manner that helps increase production capabilities and enhance the competitiveness of Egyptian products in global markets.
Maait said that the second phase of this initiative will commence at the Ministry of Finance during the period from 7 to 28 February. Those seeking to access the initiative can apply every working day from 9:00 to 19:00.
The minister said that the success of the initiative’s first phase has prompted the government to launch a second phase with the same framework and conditions. It includes the dues of exporting companies with the EDF.
He indicated that the companies benefiting from the first phase of this initiative which have remaining dues, and the ones that were not disbursed or did not participate in the initiative, can apply to join the second phase. He also highlighted the success of the first phase of the initiative in attracting a large number of exporters.
Maait said that the government spent about EGP 21.5bn during the year to support the export sector and exporters, through six initiatives.
The minister confirmed that, during November and December 2020, all the exporting companies benefiting from the initiative spent all the amounts of late export support to the Export Development Fund. This reflects the government’s success in achieving the desired goals of this initiative, which was very popular with exporters.
He added that 2,500 exporting companies benefited from the previous five initiatives put forward by the government to pay export subsidy dues with the EDF. A total of EGP 5.6bn was spent during the last fiscal year, and EGP 2.4bn from 1 July to 25 November 2020, reflecting a total of about EGP 8bn.
The minister said that these initiatives have effectively contributed to providing the necessary cash liquidity to the exporting companies. It has helped increase their production capabilities, expand the export base, and enhance the competitiveness of Egyptian products in global markets.
Maait praised the cooperation between Egypt’s banking sector, the Ministry of Trade and Industry, and the EDF in the first phase of the initiative. This cooperation has contributed to the success of one of the fastest initiatives implemented to refund overdue sums to support exporters which took about two months in total from start to end.
He pointed out that 2,351 exporting companies benefited from the small exporters initiative and the initiative to pay 30% of the sums. A total of 337 exporting companies “set off” between export subsidies and tax and customs obligations payable by about EGP 1.2bn.
The minister added that 153 exporting companies also benefited from the investment initiative, by disbursing the first batch of export support amounts with the Export Development Fund, reflecting a total of EGP 1.8bn.
Maait pointed out that there are a large number of companies that have combined more than one initiative.