Gov’t expands subsidized loan program to include tourism: The Madbouly government will offer EGP 10 bn worth of loans at a subsidized 11% interest rate to tourism players, pushing the total value of its subsidized loan program to EGP 160 bn, Prime Minister Moustafa Madbouly saidyesterday.

The loan program targets key sectors that bring in FX: Introduced for agriculture and industry players at the start of the year, the Finance Ministry has said the subsidized loan program in part aims to help increase exports by providing businesses with the liquidity they need to up production. That could help narrow the country’s external financing imbalance and supply much-needed hard currency amid an ongoing shortage that has helped fuel inflation.

The importance of the tourism sector has only grown over the past year as the country suffers from a protracted shortage of FX on the back of the war in Ukraine. The Tourism Ministry wants to attract as many as 30 mn tourists per year by 2028, and the mix of arrivals has tilted since April 2022 from lower-value Russian and Ukrainian all-inclusive Red Sea package tours to higher value European, North American, and Asian visitors.

This isn’t the first time the sector has gotten financing support: Tourism players hadaccess to loans with a tenor of two years and a six-month grace period at an interest rate of 8% as part of Central Bank of Egypt’s (CBE) subsidized program for the industry, agriculture, tourism, and construction sectors. The CBE scrapped the program in November and passed the responsibility on to government ministries as part of the IMF’s conditions for our USD 3 bn bailout package.

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