Egypt launches 2nd phase of export support initiative

Egypt’s government has launched the second phase of export support initiative to repay the exporters their overdue, announcing that the registration will open as of 7 February through until the end of the month.

The initiative came in implementation of President Abdel-Fattah al-Sisi’s directives to back the sector, adding that it aims at disbursing the export companies’ arrears from the Export Development Fund (EDF) before the end of the current FY2020/2021 (ending in June), according to Minister of Finance, Mohamed Maait said.

The initiative’s second phase will be executed with the same conditions of the first phase, according to Maait.

He added that this initiative contributes in providing cash liquidity that enables export companies to meet their financial obligations, keep their labour force and boost the competitiveness of Egyptian products in international markets, especially with the severe impacts that hit the sector due to the COVID-19 crisis.

In September, Egypt’s government launched the first phase of the initiative that targeted instant and cash repayment of the entirety of export companies’ arrears from the EDF before the end of 2020 at a repay acceleration discount of 15 percent.

1069 export companies benefitted from the first phase, with total disbursements of 13.5 billion Egyptian pounds, according to the minister.

The initiative is implemented in collaboration with the banking system, as the finance ministry deposits a guarantee at the Central Bank of Egypt (CBE) to allow for the payment of the arrears for the companies that are willing to pay their entire dues, according to minister.

This will be allowed for the companies that will subscribe to the initiative before the end of February, end of April and the end of June, said Maait.

He added that the finance ministry will repay these sums and their proceeds to the banks that contributed to the initiative over three years.

The minister revealed that the government disbursed 21 billion pounds over a year in order to support the exports sector through six initiatives.