- Government raised tarrifs by more than 100% on some items
- Affected goods include household appliances, clothing
Egypt has raised tariffs on a range of imported items from pet foods to nuts and watches as authorities seek to reduce the country’s import bill to save dollars.
The presidential decree published in the official Gazette on Sunday affects hundreds of items such as household appliances, clothing, shoes, watches as well as food for dogs and cats. Customs tariffs were raised by as much as 100 percent on items such as some fruits and nuts, while duties on other goods were increased between 25 percent and 50 percent.
Magdy Abdel Aziz, the head of Egypt’s customs authority, said the new tariffs would help local industry as well as “lessen pressure on foreign currency” demand, according to an e-mailed statement from the finance ministry Sunday.
Egypt’s foreign currency resources have been squeezed by falling tourism revenue and a drop in exports and Suez Canal tolls. Authorities have tightened rules on financing imports of goods deemed non-essential, and the central bank, under Governor Tarek Amer, has raised interest rates and repaid funds owed to stock and bond investors to boost confidence in the economy.
“Most of the affected items are luxury rather than basic commodities,” said Ziad Waleed, an economist at Beltone Financial, a Cairo-based investment bank. “So people who are buying these items in Egypt would simply pay higher prices. That could mean higher inflation on the ground but will not necessarily impact growth as much as the present foreign currency shortage.”
The central bank also increased the monthly deposit limit for importers of food, machinery, spare parts, capital goods and medicine to $250,000 from $50,000.
Amer said in an interview this month that rules to curb what he described as unnecessary imports may save about $20 billion this year, improving the balance of payments. Egypt imported $61 billion worth of goods in the fiscal year that ended June 30, according to official data, almost three times the value of its exports.