Egypt aims to reduce its import bill by 25 percent in 2016 compared to the previous year after the central bank imposed sweeping new import controls last month, its governor told Reuters.
The country plugged major loopholes that had long allowed some importers to dodge customs tariffs, robbing the government of revenues and making it harder for local producers to compete.
“We are aiming to reduce imports by $20 billion in 2016, down from $80 billion in 2015,” Central Bank Governor Tarek Amer told Reuters late on Wednesday.
Amer said the import controls aimed to “boost local production and regulate monetary chaos to stabilize prices and inflation levels.”
Egypt’s trade deficit reached about $10 billion in the first quarter of the 2015-16 fiscal year, which began in July.
The new control measures aimed at curbing the demand for dollars, in short supply since the 2011 uprising drove away tourists and foreign investors — key earners of hard currency.
However, importers have complained that the measures are too restrictive and will make it harder for merchants to do business, possibly affecting growth.
Egypt, which relies heavily on imports, has taken a series of measures in recent months to tackle a shortfall in hard currency needed to finance its purchases.
The central bank has rationed dollars, giving priority to the import of essential goods over luxuries.
To prevent importers from sourcing their dollar needs on the black market, the central bank has limited the amount of dollars companies are allowed to deposit in banks to $50,000 a month, making it harder for importers to open letters of credit and clear cargoes.
Source: Egypt Independent