Egypt Independent

Govt mulls $10 bn import restrictions to correct balance of payments



A government source close to negotiations between Egypt and the International Monetary Fund (IMF) said on Monday that the government has resumed studies on measures to correct the balance of payments by placing restrictions on imports of certain foreign goods.

The studies concern the use of an agreement with the World Trade Organization (WTO) allowing governments to use restrictive measures on imports in order to adjust the balance of payment, said the source.

"The government has been given the green light by the WTO to use the agreement, and has already issued a decision to register foreign factories that are exporting to the Egyptian market," the source said.

He added that the government is under pressure, and currently mulling a ban on importing finished goods, which are estimated at US$10 billion. He added that once the decision takes into effect some 15 commodities will be included in the ban, with no food stuffs among them.

The source said the government has informed the WTO that it is suffering serious problems in earning foreign currencies, including remittances from Egyptians abroad, foreign tourism, Suez Canal revenue and exports. Added to the rise in imports, this has led to a deficit in the balance of payments.

He said that the WTO agreement allows the government to take steps to raise customs tariffs on imports, even permitting it to halt imports on goods, if it can prove that various restrictive measures do not achieve the desired goal.