Egypt lays out main features of its export support program: Investment Minister Hassan El Khatib and Finance Minister Ahmed Kouchouk held a joint presser to go through some of the main points of the new export support program that will begin with the start of the new fiscal year on 1 July. We put together the main points to keep you up to speed:

#1- The program this time round will nearly double in size to EGP 45 bn, up from last year’s EGP 23 bn, the ministers noted, confirming what EnterpriseAM reported a month ago. This doubling of the allocated budget is reflected in an increase in all basic ratios by 50% — a significant change of course from the current year’s program that slashed payout rates by up to 70%.

#2- The lion’s share will go towards targeted sectors, accounting for EGP 38 bn of the EGP 45 bn total, while EGP 7 bn will be used as part of a flexible reserve. The flexible component will be used to give additional support on top to complex, high-potential products — especially in engineering and chemicals — attract global players, and improve export-related infrastructure.

#3- Engineering industries are getting EGP 7 bn of the allocation, accounting for 18% of the program. Also among the recipients are the food industries with just under EGP 7 bn, agricultural produce with EGP 6.2 bn, the chemical industry with EGP 6.1, and ready-made garments with EGP 4.9 bn.

#4- Small and emerging companies will get 60% of the support, while those classes as major exporters will receive the remaining 40%, according to a set of infographics from the ministry.

#5- The program’s allocation model weighs four factors — with 50% of the weight assessing value-added content, 30% for export growth, 10% for production capacity, and 10% for job creation.

#6- Those really pushing export rates will also be rewarded for their efforts, with a 9% bump for those increasing export rates 15-25% annually and a 15% increase for those exceeding the 25% y-o-y benchmark.

#7- Those who use a larger local component ratio will also get a boost, with the greater the sector’s local component ratio, the larger its share will be of the support program, El Khatib told Al Arabiya.

#8- Speedy disbursements will continue, with the government committing to a policy of paying receivables within 90 days without deductions for outstanding taxes — a first for the program.

#9- The government will settle EGP 60 bn of overdue subsidies dating back to before July 2024 over a four-year period. Half — or EGP 30 bn — will be paid out in hardcash to exporters, while the rest will be cleared through offsets against taxes, customs dues, and utility bills.

#10- Exports opening up access to Africa and businesses in Upper Egypt will also be given more support, with the increase in rates for both factors increasing from a 15% addition to a 25% addition in the new program.

#11- The new program will retain the requirement that exporters give up a percentage of their USD proceeds — currently stands at 50% in this fiscal year’s revamped program — El Khatib

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