Randa Achmawi*
Cairo – Customs clearance in Egypt has been considerably shortened over the last three years, according to an article by weekly economic newspaper Al Ahram Iktissadi. In its last edition, the Egyptian magazine shows that significant obstacles that made the entry of products into the country more difficult have been eliminated, providing a great boost to private sector activities.
Since the inauguration of prime minister Ahmed Nazif, in 2004, customs rates have dropped 16% on average, to 9% at the end of last year. Apart from that, several import and export tariffs that used to exist have been eliminated and the processes simplified. The magazine also adds that the new law about customs matters should be examined by the Parliament still in the current legislature.
To implement this project, Egypt had to count on international help and received for this purpose US$ 30 million from the United States Agency for International Development (USAID), 6 million euros from the European Union and 1.3 million Swiss franks from Switzerland, as ways to finance the reforms.
"Customs reforms are in the centre of our interests, as they are directly connected to the liberalisation of trade and translate a political engagement of Egypt," stated the head of the sector of Economic Modernisation at the European Union Delegation to Cairo, Gerhard Krause. Report Doing Business 2007, published by the World Bank, pointed out that among the 10 sectors studied, Egypt has progressed in 5, including customs reforms.
"Our objective is to rise from a logic that maximizes revenues to a logic that maximizes the quality of the services. The Customs Organisation is no longer connected only to collecting revenues, but also to improving its services," stated Mahmud Abu Ela, head of the Customs Reforms Department at the Ministry of Finance of Egypt.
According to him, one of the results of the reforms is that customs revenues in Egypt dropped from 12 billion Egyptian pounds (US$ 2 billion) in 2004 to 9 billion pounds (US$ 1.6 billion) in 2006. "We have just finished preparing a customs law geared at eliminating each and every distortion. The law in operation in the country was established in 1963, having been modified in 1995. We have done this because we noticed that the last changes to the text were not enough for the necessary reforms to be implemented. We can no longer base ourselves on texts written 40 years ago," added Abu Ela.
His enthusiasm, however, is being received with prudence by the private sector, as the task is very broad. "Nodoby can deny that significant progress has been made, but if we compare them with the procedures of this kind that are developed around the world, we will notice that we are still late," said Tareq Tewfiq, president of the Agricultural Food Export Council at the Federation of Industries of Egypt. "The customs clearance of food products currently takes from 8 to 15 days, against 30 days before 2004. This undoubtedly represents a great progress, but if we take into consideration our neighbours, like Jordan, we may see that these procedures take no longer than 24 hours," finished off Tewfiq.
*Translated by Mark Ament