Al-Ahram Weekly | Economy

		21 - 27 November 2002 Issue No. 613 Economy	Current issue Previous issue Site map
Published in Cairo by AL-AHRAM established in 1875

CBE: Egypt's debt stable
THE CENTRAL Bank of Egypt's (CBE's) statistical bulletin generally gives an overview of recent monetary and financial developments. The October 2002 bulletin said that at September's end, Egypt's external debt stood at $28.3 billion, down from $28.7 billion at the end of August 2002. September 2001's figure was $28.5 billion.
According to the CBE, Egypt's external debt is relatively stable, despite the slight decrease. The debt figures include private sector indebtedness, which is limited to $2.2 billion, less than 8 per cent of Egypt's external debt.
Egypt's external debt is composed of mainly official debts under soft repayment terms within rescheduling agreements. Maturities for these loans extend beyond the year 2023.
While Egypt's external debt fell, so have its foreign currency reserves, which reached $13.8 billion in July 2002, down from $14.1 billion a month earlier.
According to CBE figures, credit provided by banks was reduced by LE0.5 billion in June 2002, falling from LE266.1 billion in June 2002 to LE265.6 billion in July 2002. The business sector accounted for 73.5 per cent of total non- governmental credit balances at the end of July 2002.
35.9 per cent of credit to the private sector went to the industrial sector, 25.1 per cent to services, 22.7 per cent for trade, 2.1 per cent for agriculture and 14.2 per cent to unclassified sectors.
The surplus in the balance of payments current account grew by 22.7 per cent from April to June of fiscal year (FY) 2001/2002, to $177.6 million. The figure for the same period of the previous fiscal year was $144.7 million. According to the CBE report, this was due to an 4.9 per cent drop in the trade balance deficit as a result of a 6.3 per cent decline in the value of imports.
Suez revenues up
THIS YEAR, the Suez canal boosted its revenue to $178.7 million, compared to $159.4 million in 2001. The canal has also undergone extensive dredging. In 1975 the canal's draft was a mere 38 feet. Today, because of dredging, it is 65 feet. This has allowed the amount of freight passed through the canal to increase, increasing customs revenues. The increased draft also enables heavier ships to negotiate the canal.
In addition, the canal now has two channels, minimising the time that ships need to be in the canal. This has also increased traffic and revenues.
Unfortunately, revenues from the Suez Canal and exports, have not managed to offset declines in tourism and remittances. According to financial reports, foreign reserves are now at around $14.5 billion, compared with $20 billion in 1998.
A new strategy for SMEs
THE SOCIAL Fund for Development (SFD) has a new strategy to develop Small and Medium-Sized Enterprises (SMEs) in Egypt.
It aims to implement a number of policies that will help to provide SMEs with more incentives, including better access to financing and more facilities to import the required materials for industry. The ultimate goal of the strategy is to increase exports and help maximise national savings.
The Fund is also studying the possibility of buying the right to produce international trademarks under license. These will be produced by a number of small factories, to be established especially for this purpose.
The Fund's strategy also aims to use semi-skilled and non- skilled labour in a more efficient manner. This will be a way to overcome unemployment among the socially-deprived. According to the SFD's strategy, SMEs are a good way to increase national savings. Additionally, SMEs help to create capital, which will leads to greater prosperity in society. Encouraging the growth of SMEs will also help replace many exports with home-made products.

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