Egyptian Cabinet Unveils EGP 50 Billion Initiative to Boost Tourism

A new EGP 50 billion initiative aimed at boosting investments in hotel rooms has been unveiled by the Egyptian Cabinet. The program introduces loan facilities and investment incentives to encourage private sector participation in the country's tourism industry.

It is projected that every additional 15,000 rooms will generate between EGP 1 billion and EGP 2 billion in value-added tax and EGP 2 billion in commercial and industrial profit tax. Moreover, the initiative is expected to create approximately 45,000 new jobs directly and indirectly.

Beyond its economic impact, the program aims to bolster foreign currency reserves and combat unemployment by stimulating private investments. The key features of the initiative, jointly developed by the Ministry of Finance, the Ministry of Tourism and Antiquities, and the General Authority for Investment and Free Zones (GAFI), were reviewed and approved during the Cabinet meeting.

Under the program, loan facilities will be tailored to suit the business volume of each company and adhere to established banking regulations. Companies can access a maximum credit size of EGP 1 billion, with a combined limit of EGP 2 billion for transactions involving two participating banks. Funds can be utilised for constructing new hotel rooms, acquiring inactive rooms, or operating existing rooms. Eligible locations include major tourist destinations such as Greater Cairo, Luxor, Aswan, the Red Sea, South Sinai, and the North Coast.

The initiative will be in effect from January 1, 2024, to December 31, 2024. However, continued access to the loan facilities is subject to adherence to the agreed-upon repayment schedule. The executive mechanisms for the initiative will be developed through collaborative efforts involving the Ministry of Finance, the Central Bank of Egypt, the Ministry of Tourism and Antiquities, and other relevant stakeholders.

In addition to loan facilities, the initiative offers investment incentives for tourism projects aligned with Investment Law No. 72 of 2007. The Supreme Council for Investment will determine the specific eligible projects. To ensure responsible implementation, certain conditions have been established, including the requirement for companies to sell 40% of their revenues in foreign currency through the banking sector at the official exchange rate during the five-year support period. Beneficiaries must also obtain an operating license before receiving support, with the deadline extended to June 30, 2026, to facilitate increased hotel capacity.