Manufacturers are calling for the liberalisation of capital by ending deposit and transfer restrictions. Writes Ahmed El-Mahdi
As economists expect an increase in the Suez Canal revenues following the inauguration of the second canal, industrialists called on the Central Bank of Egypt (CBE) to reconsider decisions taken recently, particularly limiting the amount of monthly withdrawal by a maximum of $50,000 and other measures that have enraged factories.
Increasing hard currency in Egyptian banks requires having the Central Bank revise its current policies, which represent a real crisis to the industrial sector which depends on importing raw materials used in production, according to head of the Chamber of Engineering Industries at the Federation of Egyptian Industries Hamdi Abdel Aziz.
The biggest challenge facing the continued production is represented in opening credits of factories, he said, pointing out that factories, whether local or foreign, suffer from providing hard currency at banks which stymies production and expels foreign capital and therefore harms the state’s economic situation.
Defining the monthly and daily deposit and withdrawal value by the CBE forces foreigners to seek a better atmosphere that allows them to freely transfer funds, he said, calling on the government to modify these policies in order to attract foreign investments in the coming term.
“I am against fixing the dollar exchange rate after increasing it through any source of income. Factories do not mind having the rate reach 9 or 10 pounds as long as it is available at banks when they open credits. But, the government fears an increase in the deficit if it fixes the rate,” he said.
Former head of the Chamber of Leather at the Federation of Egyptian Industries Hamdi Harb said that solving the problem of the dollar for the industrial sector is totally in the hands of the government, voicing hope that the CBE becomes aware of the obstacle it places before attracting and increasing investments through its decisions as regards defining withdrawal and deposit operations.
Capital looks for freedom of movement and not restriction, which is the case right now, he said, pointing out that the industrial society will not pin hopes on increasing capital following the inauguration of the New Suez Canal as the state has commitments towards importing strategic commodities.
Harb called on the government to study models that attract investments such as the Jabal Ali zone and others in the Arab World, adding that foreign investors wish to iron out all obstacles mainly providing hard currency when opening credits which banks cannot provide.
He pointed out that if manufacturers are able to obtain dollars from outside the bank they will not be able to deposit it at once but only $10,000 per day, which is equivalent to $300,000 per month. The figure is very little in the field of importing raw materials whose bill amounts to millions of pounds, he added.
He added that the coming term needs a bold person who can take decisions that attract investments, pointing out that the New Suez Canal alone will not attract investments without helping elements.
