Egypt begins paying long-overdue export debts

After years of mounting frustration over unpaid dues, Egypt’s exporters are set to receive long-awaited financial relief—though only partially—for goods shipped before mid-2024. The Ministry of Finance has earmarked EGP 25 billion for disbursement in August, delivering on a key promise to inject liquidity into one of the country's most crucial sectors.

A promise delayed, now partially delivered

Starting 7 August, around 2,400 companies will receive 50 percent of what the state owes them, through a network of public banks. This move follows repeated calls from export-heavy industries for the government to make good on overdue export subsidy payments—arrears that have quietly strained working capital and delayed growth plans across several sectors.

The other half of the owed payments won't be made in cash, but through a clearing system. Exporters will be allowed to write off their receivables by offsetting them against debts they owe to government agencies—including taxes, customs, insurance, and utilities. While practical in theory, some companies may find this less helpful than direct funding.

Liquidity meets policy: a budgeted compromise

This partial repayment is part of a larger budgetary allocation of EGP 78.1 billion in FY2025/26 to support export activities and industrial development. Of that, EGP 44.5 billion is dedicated specifically to settling back payments. It's a politically calculated move—one that tries to balance fiscal caution with economic stimulation as Egypt continues negotiations with the IMF and manages persistent inflationary pressures.

Ahmed Kouchouk, the newly appointed finance minister, pitched the initiative as central to the country’s shift toward private-sector-led growth. “We are committed to providing the liquidity exporters need,” he said, but the structure of the payout reflects the government’s tightrope walk between supporting production and preserving macroeconomic stability.

Why this matters now

With Egypt still reeling from foreign currency shortages and external debt burdens, the government sees exports as a vital channel for inflows. Yet exporters have long struggled with delayed state payments that tie up capital, increase reliance on borrowing, and discourage reinvestment.

By finally addressing part of the arrears, the government hopes to restore credibility to its support mechanisms and send a positive signal to domestic producers and international partners alike. Still, memories of missed deadlines from previous rounds leave some exporters wary.

The dual-track system is a stress test for trust

Nevin Mansour, advisor to the finance minister, framed the cash-plus-clearing model as both fiscally efficient and operationally flexible. “It helps relieve pressure on the budget while enabling smoother coordination between exporters and state agencies,” she explained.

But not all exporters will view this system as equal. Smaller companies with few outstanding government dues may struggle to benefit from the clearing option. And for firms heavily reliant on direct liquidity for imports and payroll, clearing could be more accounting trick than actual relief.

A signal of reform or a temporary patch?

Since 2019, Egypt has paid out over EGP 70 billion in back subsidies through various programs, yet the backlog has persisted. The government’s ability to clear arrears quickly—and transparently—may determine how confident businesses feel about future participation in state-backed schemes.

This August payment is a meaningful gesture. But whether it will ignite a sustained revival in Egypt’s export engine or merely buy time depends on what comes next: improved consistency, simpler processes, and real follow-through.