Trade balance deficit loses $10B in one year: Trade Minister

CAIRO – 25 August 2017: The trade balance deficit has decreased $10 billion in one year to reach $42.9 billion in 2016 after registering $52.9 billion in 2015 to record its worst level ever, Minister of Trade said Wednesday.

In an interview with dmc Channel, Minister Tarek Kabil added that "imports used to kill industry for their bad quality and for the lack of surveillance."

Imports stood at $71.3 billion in 2015 while exports registered only $18.7 billion. They declined to $63.8 billion and exports rose to $20.3 billion in 2016, followed by a further drop in imports in 2017 to record $23.8 billion, while exports stood at $12.8 billion.

Two major decisions were taken at the end of 2015 to enhance and organize imports:

importing factories are required to submit their registration and a quality certificate, in addition to an examination for the shipments, Kabil noted.

Industrial permits obstacles

Kabil said that the ministry has solved a great deal of the problems of the industrial licenses, where 634 days were needed to obtain a permit after getting the approvals of 11 bodies. Now, a license could be obtained in less than 30 days through only the Industrial Development Authority (IDA).

The

new Industrial Permits Act

is one of the greatest successes in the industry sector, Kabil said, adding that the old law used to finalize the license in 154 procedures and would be issued in a written form but the new one finalizes the license in 19 procedures in an electronic form.

The minister highlighted that the law represents the first tine where the government drew one of its rights to the private sector, as the IDA is the only authority to give the licenses.

The act was issued on August 13. It targets facilitating procedures of starting an industrial business and encourages the integration between the unofficial and official economies.

Kabil explained earlier that 80 percent of the projects will be granted licenses upon notifications, while 20 percent will have to wait for the approval of IDA due to being categorized as “risky” industries.

National Industry

Kabil highlighted that Egypt has reached an advanced level in the national industry, as the Egyptians depend on local products with the knowledge that these products are manufactured nationally.

About 64 percent of the ready-made garments used in the domestic market are manufactured in Egypt, while 85-90 percent of the Egyptians' consumption of furniture comes from the national industry.

"We have to reduce the prices and raise the quality to be able to compete nationally and internationally," the minister said, adding "we targetboosting the internal competition to meet the needs of the local market with high-quality goods."

Difficulties facing industry

The slowdown of the of the global trade and growth, seen in the mobility of the Suez Canal, is affecting the local economic growth, in addition to higher rate of dumping in markets; companies tend to sell their products.

The minister noted that despite the aforementioned, results are positive. The growth rate registered 4 percent, foreign reserves reached over $36 billion, unemployment rate fell to 12 percent after 12.8 percent in 2016, and the balance of payments achieved a surplus of $11 billion after incurring deficit of $3.6 billion.

Industrial plots

Around 16 million meters of industrial plots were offered for sale in 2016, compared to 9.5 million meters in 2015, Kabil said, expecting that by 2018, Egypt would have plots with no demand on them. Industrial plots to be offered are projected to reach 60 million meters by 2020.

The minister announced during the interview that an agreement will be inked soon with a mega company to establish the first industrial city in Egypt.

In July, the ministry launched three complexes in Minya, BeniSuef and Fayoum governorates in light of its plan to build eight industrial complexes in Upper Egypt in 2017.

Each licensed complex would contain 120 production units to undertake different industrial activities.

A total number of 15 complexes are set to be issued before the end of 2017, as part of the Trade Ministry’s plan to build 22 industrial complexes by 2020.