Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

I Hope That This Decision Will Be Reconsidered !

The decision cancels the initiative of financing the industrial sector with a loan at an interest rate of 8%

Sat 26 Nov 2022 | 12:34 PM
Elham Aboul Fateh
Elham Aboul Fateh
Elham AboulFateh

A sudden decision that needs to be reconsidered.. The decision cancels the initiative of financing the industrial sector with a loan at an interest rate of 8%, so that the interest rate becomes 19%. Indeed, banks began to address industrial companies last November 21.

Removing subsidy from small and medium industries caused companies to become very confused amid a global economic crisis and a local market that needs more goods and industries in light of the rise in currency prices globally and the flotation of the pound locally, which affected everyone.

In fact, this initiative, presented by the Central Bank, was the savior for many sectors during the last period, including industry and tourism ones, as it helped many companies resist collapse and stagnation, and bear heavy debt burdens, due to the crushing crises that Egypt and the other countries of the world went through including the repercussions of the Corona crisis, the lockdown and reducing  employment. Then the outbreak of the Russian-Ukrainian war, and the consequent crises in energy and grains, and the supply chain crisis that affected the whole world. The repercussions were harsh for developing countries as well, including Egypt, and we have seen how the 8% initiative was effective amid the crisis in supporting  the industrial sector, especially small industries that are directly related to the lives of citizens.

We could understand and realize the floating of the currency and the high price of the dollar as one of the Fund’s requests in favor of the country in the long and medium term, but canceling the initiative is a decision that needs reconsideration because it means amending import conditions that, according to custom, the law, and the constitution, must be discussed with representatives of stakeholders from the Federation of Industries and Investors Associations. It also places new industries in unfair competition with the industries that obtained this subsidy, especially at this time when more subsidy is needed for all sectors, including the consumer.

What is required is to reconsider this decision  in support of the national industry and then create an appropriate financing package for a period that we consider transitional in order to overcome the current crisis by increasing industrial, agricultural and service production to increase exports and achieve the $100 billion export initiative!