Egypt has eased trade procedures by reducing taxes and customs on imports from third countries much to the relief of Dubai companies exporting to Egypt, according to a senior Egyptian diplomat.
Fahmy Fayed, Egyptian Consul General, says that customs duties on imported goods have been “radically reduced,” with some of them reaching even 20%.
The decision of the Egyptian government five years ago to stop any exports coming to the country from third countries and not from the country of origin and the higher import on those which are not carrying a certificate of origin have combined to deal a blow to Dubai companies, especially those in Jebel Ali Free Zone having large exports to Egypt.
Although later authorities in Cairo enforced a new stipulation, by which importers from third countries had to pay the full cost of the import upfront, instead of the15% they used to pay to banks previously to open letters of credit (LCs). This has in effect escalated the cost of imports.
Fayed says that the ongoing economic reforms in Egypt, the second biggest economy in the Arab world and the fastest growing in Africa, create more investment opportunities and a better business environment in the country for foreign investors, especially from Arab countries, including the UAE. “Every week we have a new development in the economic field. In fact, our minister of investments said that anyone who is having difficulties in investing in Egypt will be helped out,” he adds.
He is very optimistic about the future of inter-Arab trade saying that the Pan Arab Free Trade Zone will most probably be established by 2008. “The inter-Arab trade is taking shape, with red tape and trade barriers being gradually removed and by 2008, we will hopefully establish the Pan Arab Free Trade Zone,” he says.
According to Ibrahim Hafez, Egyptian ambassador to the UAE, last year bilateral trade between the UAE and Egypt amounted to US$368mn and with the new developments in Egyptian economy, these figures are poised to further grow in the coming years.