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Sunday, 6 September 2020

Export Subsidy Fund to pay out EGP 400 mn in overdue subsidies in September

The Export Subsidy Fund will dole out EGP 400 mn in export subsidies this month after inking 35 new agreements with exporters to disburse EGP 2 bn in subsidy arrears, Finance Minister Mohamed Maait said in a statement yesterday. This brings the total number of agreements signed with exporters since December to 153, which will be paid EGP 12 bn over five equal installments.

Another 12 companies will receive their second installments today, totalling EGP 253 mn, Trade and Industry Minister Nevine Gamea said in a separate statement. The first installments, amounting to EGP 291 mn, were paid out in December, she said. The fund paid out EGP 1.14 bn in subsidies during July and August, she added. The government has earmarked some EGP 7 bn in its FY2020-2021 budget to pay off arrears it has owed exporters since 2012. The fund paid out EGP 6 bn in overdue subsidies to 1,667 companies during FY2019-2020.

Background: Payments of bns in overdue subsidies under an old framework have been moving forward since last September. Exporters are eligible for up to 40% in cash and can receive the remainder through either writing off taxes or customs or receiving industrial land at a discount. The government has said it is committed to doling out at least 30% of the arrears it owes to exporters this year, with each company receiving at least EGP 5 mn.

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