The Finance Ministry is planning to increase allocations for export subsidies and industrial localization programs in the FY 2026-27 budget draft, a senior government official tells EnterpriseAM.

IN CONTEXT- The Madbouly government is aiming for 15% annual growth in exports, targeting USD 75 bn in total exports by the end of 2026, with a focus on the automotive and mobile phone industries, alongside import substitution initiatives. The government has been working on clearing 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.

Why it matters: Boosting exports is central to narrowing the trade deficit, which remains the primary source of pressure on the treasury and the EGP exchange rate. “We are currently working on developing incentives to boost exports and to align with the plans of other government entities to transform Egypt into an integrated regional logistics hub, while supporting services exports and high-value exports,” the source said.

The strategy: Total subsidy funds are set to grow even as percentage breakdowns remain unchanged through FY 2027-28. Given the projected growth, total allocations are expected to surpass EGP 50 bn, up from EGP 45 bn this year, according to our source. The current program allocates support based on value added (50%), export growth rate (30%), production capacity (10%), and labor force (10%).

Targeting high-value niches: The government is earmarking EGP 7 bn specifically for

complex industries to attract global manufacturers. “We are focusing on globally limited, complex industries to ensure high demand and quick returns,” the source noted.

Reducing red tape: To further boost exports, the government is also working to slash customs clearance times by 75-90% — from an average of eight days currently to just 48 hours— via a new independent export system. “Accelerating the procedures through the upcoming launch of the customs facilitation packages along with the activation of the new export system would save the state USD 2.1 bn in the next fiscal year,” another government source tells EnterpriseAM.

Export council have their say

Chemicals and fertilizers: Achieving a 15% annual growth rate is an “ambitious but achievable goal,” provided supportive policies and international standards are maintained, said Chemical and Fertilizers Export Council Chairman Khaled Abu Al-Makarem.

Engineering industries: “The major shift in government support for export-oriented production has already boosted export volumes across sectors,” said Engineering Export Council Chairman Sherif Al Sayyad. The council is targeting USD 7.5 bn in exports this year.

Our take: Exports are vital for FX inflows and mending the trade balance. However, the speed of implementation for structural reforms, easing investment burdens, and the Investment Ministry’s push forunifying fees by replacing the numerous non-tax financial burdens and fees imposed by state entities with an additional income tax will be what truly keep Egyptian products competitive in a volatile global economy.

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