Export councils are calling for more subsidized financing initiatives: Export council representatives met with Prime Minister Moustafa Madbouly earlier this week to present demands aligned with the government’s export growth plans, Engineering Export Council head Sherif El Sayad told EnterpriseAM. Exporters are calling for a new low-interest financing initiative for raw materials and production inputs, separate from the existing initiative for equipment.

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ICYMI- The Industry Ministry in April launched the first phase of a new EGP 30 bn financing initiative offering reduced 15% interest rates to seven priority industrial sectors, including food, pharma, and chemicals. The program will finance machinery, equipment, and production lines at the discounted rate for five years.

The pharma sector is also asking for urgent support. Two sources in the pharma industry told EnterpriseAM that companies submitted demands for an additional financing initiative to ease international market access and immediate settlement of overdue payments to sector players to free up liquidity, as price controls are straining companies’ ability to meet obligations.

SPEAKING OF THE PHARMA SECTOR- The Finance Ministry will disburse EGP 7.4 bn in the coming days to settle the Unified Procurement Authority’s (UPA) overdue payments to pharma companies, according to a ministry statement. The ministry has earmarked another EGP 7.3 bn for credit facilities to sector players. We were told last month that the UPA plans to settle some EGP 43 bn in overdue payments to pharma companies during the current fiscal year.

The Federation of Egyptian Industries and the export councils are also calling to expand the sectors eligible for subsidized financing at a 15% interest rate. This should target companies with strong export potential and help fund production line upgrades and the purchase of modern equipment to boost capacity, we were told.

The councils also requested that direct deposits be accepted as proof of proceeds for exports to African markets bordering Sudan — including Chad, Niger, Cameroon, and the Central African Republic — as the traditional Sudan transit route is no longer viable. Chad’s location could make it a key transit hub for Egyptian goods, El Sayad said. They also pushed for the establishment of Egyptian trade centers in select African countries, with Investment Minister Hassan El Khatib saying Côte d’Ivoire will be the first.

What else do exporters want? Among their priorities is speeding up payouts under the new export subsidy program, according to El Sayed. They’re also asking that 50% of subsidies owed to SMEs for shipments through June 2024 be paid in cash instead of via tax and ins. offsets to help them maintain production and exports.

REMEMBER- The Finance Ministry began disbursing overdue export subsidies totaling EGP 5 bn to some 2k exporters last month under the revamped export subsidy program, under which will exporters receive 50% of their overdue dues in cash over four years, with the rest offset against liabilities.

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