By Ahmed Salama
Egyptian importers expect the cost of shipping and insurance of imports to rise after Standard & Poor’s rating agency downgraded Egypt’s credit rating from B to B-.
Ahmed Shiha, president of the Importers Division of the Cairo Chamber of Commerce, expected these costs to rise 20 per cent over the next few months.
He added that banks were planning to take steps to restrict extending credit lines for suppliers, which would reflect negatively on the flow of imports and raise the price of products.
Hamdi Al-Naggar, president of the Importers Division, said, “the recent downgrade in Egypt’s credit rating would lead to a decrease in the number of imports entering the country.”
Makram Mahanna, president of the Pharmaceutical Production Chamber of the Industries Federation, said that the recent downgrade in Egypt’s credit rating would have a huge negative effect on the country’s import levels. He added, “the country’s current economic crisis will force suppliers to pay the cost of shipping upfront, which would increase the burden on the countries manufacturers.
He added that suppliers are currently unwilling to deliver shipments until they had been paid for in full, which would have a negative effect on the production capacities of many factories, and could potentially lead to an increase in the price of medicine.
Osama Al-Saadi, member of the Pharmaceutical Industries Chamber, said that he expected dealing with foreign suppliers to become increasingly difficult. Foreign companies doing business in Egypt previously had easy access to credit and were often granted grace periods of up to four months before having to make payments stipulated in their contracts. Now, Egyptian suppliers are demanding a 100 per cent upfront payment of all expenses before business could be done.