Banks in Egypt awaits a signal to include tourism in an industrial assistance effort
Banks in Egypt are waiting for the Central Bank of Egypt (CBE) to give the green light to include the tourist sector in the effort to boost industry, which would increase its worth to EGP 160 billion.
In order to broaden the range of beneficiaries, Prime Minister Mostafa Madbouly demanded that the tourist industry be included in the initiative, which presently comprises the industrial and agricultural sectors.
As part of this initiative, Madbouly and the Minister of Finance have decided to contribute EGP 10 billion to the tourist industry, bringing the total finance to EGP 160 billion for the targeted productive sectors, which will enable them, raise their business volume and expand output.
In January, the Cabinet approved the broad structure of the initiative to improve the industrial and agricultural sectors. It plans to lower the interest rate on loans granted to the two sectors as part of continued support for them and their activities.
According to the initiative, EGP 150 billion has been allocated, with EGP 140 billion allocated to finance working capital operations and EGP 10 billion allocated to finance the purchase of capital goods, at a decreasing interest rate of 11%, provided that the Ministry of Finance bears the difference in interest rate, and the initiative will last five years.
The initiative’s objectives
Minister of Finance Mohamed Maait said that this initiative will be implemented despite the harsh global economic challenges. He pointed out that the state treasury will bear more than EGP 13bn annually and the interest rate difference.
Maait added that the government will continue to implement this initiative in the budget for the current fiscal year, despite the 2% hike in interest rates, which contributes to encouraging investors to expand production, achieve the strategic goals of the state by maximizing production capabilities, meet the needs of local demand limit imports, and expand the base of exports in order to reach the dream of $100bn exports.
This is expected to strengthen the structure of the national economy, sustain growth rates, push production, and provide more job opportunities.
The Minister of Finance reaffirmed the government’s desire to broaden the initiative’s beneficiary base by establishing a ceiling of EGP 75 million for funding one company and EGP 112.5 million for multilateral corporations.
This effort, he said, applies to innovative and renewable energy operations, free zone enterprises, and agricultural cooperative groups. He also stated that it is illegal to utilize the credit facilities offered to pay any obligations owed to the banking sector in order to ensure that the effort achieves the desired effects.In January, the Cabinet approved the broad structure of the initiative to improve the industrial and agricultural sectors. As part of the plan, it wants to lower the interest rate on loans granted to the two industries.
