Egypt Allocates EGP 1 Billion to Enhance Local Automotive Industry

The Egyptian government has set aside EGP 1bn in the 2024/25 budget to localize the automotive industry, enhance local component production, and attract investments. Seven companies are currently on board, with automated tax transactions to support the initiative. Nissan has already benefited from an incentive, reflecting the government’s commitment to improving local production.

The Egyptian government has allocated EGP 1 billion in the fiscal year 2024/25 budget to enhance the localization of the automotive industry, as stated by Finance Minister Ahmed Kouchouk. This initiative aims to attract investment in car manufacturing and increase the local component production to over 45% within the year.

Currently, seven companies are engaged in the automotive industry localization initiative. The first shipments of production inputs under this program were released by the Customs Authority last August. Additionally, tax and customs transactions for registered companies are now automated to expedite processes, while a specialized unit at Egypt’s Finance Ministry has been created to facilitate operations and address challenges faced by these firms.

Kouchouk emphasized ongoing communications with car manufacturers to encourage participation in the program, aiming to meet state objectives for increasing the local manufacturing component. He also noted that support from other ministries is being coordinated to further promote local car production.

In terms of incentives, Kouchouk clarified that eligibility is contingent upon meeting specific targets. Notably, Nissan has received its initial incentive of EGP 120 million, which can be utilized to settle government debts, thereby alleviating financial burdens and enhancing cash flow for the company’s operations.

In summary, the Egyptian government is investing EGP 1 billion to bolster the local automotive industry through incentives and increased localization of production. The initiative involves partnerships with automotive companies and aims for substantial growth in local component production. Overall, this strategy is designed to enhance car manufacturing capabilities and reduce financial strains on participating companies.

Original Source: www.dailynewsegypt.com