Egypt Allocates EGP 1 Billion to Advance Local Automotive Industry

The Egyptian government has allocated EGP 1 billion in its fiscal year 2024/25 budget to localize the automotive industry, aiming to increase local component production to over 45%. Seven companies are involved in this initiative, and the government has automated customs processes to facilitate operations. Nissan has already received an incentive of EGP 120 million to support its production efforts.

The Egyptian government is investing EGP 1 billion in its fiscal year 2024/25 budget to promote the localization of the automotive industry, as stated by Finance Minister Ahmed Kouchouk. This initiative aims to attract investment partnerships in car manufacturing, with a target of increasing local component production to over 45% within the year.

Currently, seven companies have registered under the automotive industry localization initiative, with the Customs Authority having begun shipping production inputs in August. The government has automated tax and customs processes for these registered companies, aiming to streamline their operations. A specialized unit within Egypt’s Finance Ministry has also been established to assist with procedures and tackle any challenges that may arise.

Kouchouk emphasized ongoing communication with car manufacturers to encourage participation in the new system designed to boost local component production. The government is collaborating with relevant ministries to facilitate local car production.

Incentives for participation are tied to the achievement of specific production targets. Kouchouk disclosed that Nissan has already received its first incentive of EGP 120 million, which can help offset government debts and alleviate the financial strain on the company, thus providing necessary cash flow for its operations.

The Egyptian government’s allocation of EGP 1 billion to enhance the local automotive industry highlights a strategic effort to boost investment and production. With the establishment of a specialized unit and automation of customs processes, the initiative aims to increase local component production significantly. The provision of incentives contingent on meeting production targets further reflects the government’s commitment to fostering a robust automotive sector.

Original Source: www.dailynewsegypt.com