Export subsidies worth more than $500 mln in Egypt’s new budget

Sunday 03-07-2016 02:23 PM

Trade Minister Tarek Kabil. Photo handout from the Ministry of Industry and Trade

CAIRO, Jul 3 (Aswat Masriya) - Egypt's volume of export subsidies amount to EGP 5-6 million (around $563,111-$ 675,733) in the recently approved budget for the year 2016/2017, the trade minister said on Saturday.

The ministry is preparing a new progamme aimed at supporting exports, state-run MENA reported, citing Trade Minister Tarek Kabil.

The programme is made up of three pillars, including building a broader base of exporters, granting advantages to small exporters and introducing new industries.

Egypt's House of Representatives approved the state's budget last Wednesday without amendments, except for adding sewage and drinking water to the health budget.

Kabil commented on the recent U.K. vote to leave the European Union saying that the Egyptian government is studying the repercussions of the decision, if any. He believes that British investments and bilateral trade relations   will not be affected by the Brexit.

Britons have voted late June in favour of U.K.'s exit from the EU. Global financial markets experienced a huge plunge on the day the results came out. The British pound tumbled down to as much as 10 per cent against the dollar for the first time in 30 years and oil prices dropped five per cent at the end of trading.

The EU-Egypt Association Agreement, which came into effect in 2004, liberalised trade between Egypt and the EU Single Market, which Britain may or may not remain part of after Brexit’s full implementation.

Kabil believes the Brexit will have political consequences on the EU, not on Egypt. He said the grants Egypt receives from the EU will not be affected by the U.K.'s exit.

He described the volume of British-Egyptian trade as "reasonable", saying that the size of Britain's exports to the Egyptian market amounts to $1 billion while Britain's imports from Egypt make up $600 million.

Regarding the reduction of gas prices for factories, Kabil said the Supreme Energy Council calls for the unification of reduced prices for all industrial sectors, not only steel.

He pointed out that the price of gas is linked to the production cost of Urea, a fertilizer that relies heavily on gas for its production.

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