Some 601 exporters received EGP 368 mn in overdue receivables through the Export Development Fund, concluding the first tranche of the direct payment portion of the state’s mechanism to settle its owed export subsidy arrears, according to a statement from the Finance Ministry. The move is part of the state’s efforts to clear EGP 60 bn in overdue payments to exporters tied to shipments dating back to before 30 June 2024, which will be done through a combination of banknote disbursements and offset arrangements.

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Expect to see more payments like this soon, with exporters set to receive 50% of their dues in banknote installments over four fiscal years, Prime Minister Moustafa Madbouly said when announcing the new mechanism in January. A total of EGP 8 bn will be paid out every year, while the remaining 50% will be settled through offsets against outstanding or future liabilities with the Tax Authority, Customs Authority, and utility providers like gas and electricity companies.

The state is also keen not to let arrears from export subsidy commitments pile up again, with the new mechanism requiring that exporters receive full payments going forward within 90 days and without tax deductions. The state has committed EGP 45 bn for the program this fiscal year.

Clearing backlogs and speedy subsidy payments will support the local export market, according to Finance Minister Ahmed Kouchouk. The funds will provide the needed liquidity to facilitate exports and improve Egyptian companies’ competitiveness globally.

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