Economic

Egypt: The faltering factories crisis continues to worsen

Specialized economic reports revealed that 63 percent of Egyptian factories were operating in 2019, with less than 75 percent of their production capacity.

The reports said that the industrial sector contributes 15 percent of the workforce and that its percentage in non-oil exports reaches more than 80 percent, amid questions about the reasons for the decline of the private sector in Egypt, especially the industrial one.

Egyptian economists unanimously agreed that the main reason behind the losses achieved by the private and industrial sector in Egypt during 2019 is the “failed” economic measures that were taken by the military coup regime, headed by Abdel-Fattah El-Sisi, in addition to crowding out the military and the Ministry of the Interior in many of the economic activities of the private sector.

The ongoing factory crisis

The faltering Egyptian factories crisis continues to worsen, while the ministerial efforts to solve this dilemma are still futile, as the meetings held between government representatives and factory owners did not lead to a result.

In the context, the Minister of Trade and Industry, Nevin Jameh, met today, Monday, with a number of investors, to discuss the crisis that a number of factories continued to stop working for years, and the accumulation of debts on them, some of which forced the freezing of their industrial activity and the displacement of the workers in them.

One of the officials in the Egyptian Industries Federation believed that the minister’s meeting today with a number of investors is similar to the previous meetings, that is, without taking any measures or reaching decisions on the ground.

He stressed that the Central Bank made a decision last December to settle the debts of the troubled factories, which ranges between 10 and 50 million pounds, which amount to 3 thousand factories, and to transfer all the debts of the owners of those factories from the banks to the central bank so that he will pay the banks. And the debts of the Central Bank become on the investors.

The solution in debt forgiveness

He added that dropping the accumulated debts of banks on factories that exceed 30 billion pounds is the necessary solution to get these industrial facilities back to work, pointing out that the troubled factories file is one of the most prominent files that the governments after the January 25, 2011 revolution announced their intention to be on Its top priority, but the crisis continues without adequate solutions from the official authorities.

Egypt: The faltering factories crisis continues to worsen

Mohamed Hamdallah, President of the Assiut Investors Association, said that the troubled factories in the Upper Egypt sector reach more than 1,200 factories, especially in Minya, Assiut, and Sohag, distributed between different industrial sectors.

Causes of private-sector losses

The economist and chairman of the former Al-Ahram Foundation, Mamdouh Al-Wali, revealed to Arabi 21 that businessmen, industrial societies and federations were subjected to great pressure from the Egyptian regime to refrain from talking about their losses, in the framework of the regime’s endeavor to confirm that economic conditions are progressing after the procedures Economic results that resulted from the government’s agreement with the International Monetary Fund in 2016.

Al-Wali asserts that the most prominent industrial sectors that have achieved losses during 2019, and a candidate for continuation during the current year, are cement, textile, and iron companies, energy-intensive industries, ceramics, porcelain, aluminum, and a large number of the food industry and the printing sector.

And on the most prominent causes of these losses, the economist notes that high energy prices come to the fore, especially as all companies have changed their operating system from electricity and fuel to natural gas, as Egypt has an abundance of natural gas and this will help to reduce inputs Industry, however, the reality was otherwise. The government sold natural gas to investors at prices higher than international prices, which left investors with an advantage in competing with importers.

Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close