President Abdel Fattah El Sisi on Saturday urged Egyptian industrialists to manufacture components they currently import, warning that the country’s import bill was rising every year.
The Egyptian leader said the country's present “dollar crisis” has laid bare some negative realities about the economy, which has been battered by the fallout from Covid-19 and now the Russia-Ukraine war.
“The dollar crisis has been revealing. Our dollar (import) bill increases year after year and it’s not about importing luxury good. It reflects the evolution of the Egyptian economy,” he said.
“We must manufacture a large segment of the industrial components we buy abroad. This way we help the GDP grow and create jobs.”
Mr El Sisi was speaking just two days after Egypt and the IMF announced a $3 billion deal, subject to approval by the IMF’s executive board in December.
The deal is also expected to enable a large, multiyear financing package, including about $5bn in the fiscal year ending June 2023, reflecting “broad international and regional support for Egypt, the IMF said.
The announcement on Thursday was followed by a widely-anticipated devaluation of the Egyptian currency, the second since March, and a two per cent rise in key interest rates designed to check inflation, already at 15 per cent.
The latest devaluation of the Egyptian pound left it trading at around 22 pounds to the dollar at the end of trading on Thursday, a drop of more than 30 per cent since before the March devaluation and an all-time low.
Egypt has suffered a dollar crunch since March, a predicament chiefly caused by a soaring import bill and the swift departure of $25 billion investors had in its once-lucrative debt market.
The crunch created a huge backlog of imported goods and materials at the country’s ports waiting for banks to pay for them in dollars and allow them into the country. The backlog badly hurt local industries dependent on imports.
On Saturday, President El Sisi urged industrialists to be bold and not waste too much time on feasibility studies when the benefits of a project are clear.
He also offered up to 50/50 partnership by the government with the private sector in projects approved by authorities.
“Egypt will not grow and develop unless the government partners with the people. It’s so much better for us to work together than for you to be alone,” he said.