Vice President of the Federation of Investors Associations and President of the Federation of Small and Medium Enterprises in Egypt, Alaa Al-Saqati, said that high interest rates negatively affect any economic activity, foremost of which is industrial activity.
Al-Saqati added, in an interview with Al-Arabiya, today, Sunday, that the initiative to lend the industrial sector at an interest rate of 11% is still in place and covers 4,800 industrial entities in Egypt, with a maximum of 75 million pounds for the factory, while the rest of the financing is obtained at an interest of more than 19%. The average is 16%.
He explained that there is an understanding in Egypt of the global situation and the instability in the market, which makes the economic decision turbulent and subject to almost daily changes as a result of the conditions whose directions are not clear.
The industrial sector in Egypt is functioning well and suffers from the increase in interest borne by the final consumer, who is affected and whose purchasing power is reduced, and thus the industrial sector is affected, according to the vice president of the Federation of Investors Associations.
He added that the final consumer’s suffering is increasing, while there may be another vision to curb inflation and not increase prices more than that.
Regarding the cessation of factories in Egypt, Al-Saqati said that there is no total cessation of factories, but there is a partial cessation of unutilized production capacity as a result of the weak market, and the decline in commodity purchase rates, which is accompanied by problems in spare parts and new machines, which affects production capacity.
He continued, “We did not notice a complete stop, but we did notice a lot of slowdown in production rates as a result of remittances in general.”
The vice president of the Federation of Investors Associations indicated that there are many promises from the government that these conditions will change during the coming period, as a result of agreements between Egypt and other countries to rely on local currencies in imports, as happened with Russia, and in the event that this happens with China, a very big crisis will be resolved because most Factories’ needs, spare parts and raw materials are imported from China, which “will solve a major crisis in Egypt and we will count on it in the coming period.”
