El Khatib addressed several topics, including the settlement of arrears for shipments prior to July 2024, the status of the current program, and the restructuring of the new program towards a sustainable export support system. He confirmed that 50% of the value of the dues will be paid in cash to eligible exporting companies over a period of four years. In addition, 50% of the value of the dues will be paid through a clearing mechanism between exporters' dues and their past and future debts.
He spoke about the current program (2024/2025), noting that it adheres to the budget approved by the Ministry of Finance, increases the percentage of local content in beneficiary exports to 35%, and does not apply the new program retroactively. He confirmed that, for the first time, dues are being paid within a maximum of 90 days, and export dues are being disbursed in full without deducting the value of the outstanding tax debts.
During his presentation, the Minister moved on to discuss the new three-year program, emphasizing the future direction with a program aligned with the ambitious export targets for the next phase. He noted that this program takes into account full coordination with the various export councils to review their visions, ensuring that the specificities of each sector and the diversity of its priorities are met. He also noted that this program includes community dialogue and sessions with experts and specialists, studying leading international experiences in the field of export support, conducting a public opinion poll to evaluate the current program and development proposals from 500 existing companies, and coordinating and integrating with relevant government agencies.
El Khatib spoke in some detail about the evaluation of the exporting companies' owners of the Export Burden Rebate Program, explaining that a survey was conducted among a sample of exporters from January 20 to 23 to assess their benefits from the program and their suggestions for development. Consultations were also held with 13 export councils to examine their visions, identify challenges facing the current program, and address future needs.
He confirmed that the views of the various export councils were incorporated, as the challenges facing previous programs were studied, and the budget was allocated based on the actual needs of each export council, ensuring that the requirements of each sector are met, such as pharmaceuticals, food industries, agricultural products, furniture, clothing, and building materials, as well as chemical industries, engineering industries, and others.
The Minister reviewed the vision of the new Export Burden Rebate Program, which aims to achieve sustainable export growth. He noted that the new program offers a different vision, based on considering it part of an integrated package to enhance the investment climate and increase economic competitiveness, rather than a standalone program. This will establish a supportive and sustainable environment for export growth and increase the competitiveness and attractiveness of Egyptian products in global markets through: supportive monetary policies and a flexible exchange rate, tax concessionary packages, efforts to reduce non-tax financial burdens, developing the customs clearance system, and procedures to facilitate trade flow.
He pointed out that there are several new features that reflect a fundamental shift in the methodology for designing and implementing the Export Burden Rebate Program. He explained that regarding the program's value, the targeted annual allocation for the program is approximately EGP 45 billion (EGP 38 billion directly for targeted sectors and EGP 7 billion as a flexible allocation for strategic directions).
The Minister added that, unlike the previous program, the new program includes a set of updated criteria to ensure the fairness and effectiveness of support allocation. He noted that, for the first time, the program's design targets specific activities and products based on their degree of economic complexity, enhancing the added value of Egyptian exports. This will enhance the added value of Egyptian exports. It was agreed to begin implementing this approach in the engineering and chemical industries sectors as a first phase.