Egypt announces major funds infusion to revive tourism

Published on : Monday, July 28, 2014

egypt-tourism2Egyptian tourism and finance ministries have agreed to infuse LE1 billion worth of funds to support the tourism sector, in reparation for recent cuts in fuel subsidies.

According to Tourism Minister Hisham Zaazou, the sector will suffer losses as fuel costs make up to 80 per cent of travel and tours expenses.

 

The decision to reduce energy subsidies came in the middle of the high season and after domestic agencies had signed deals with foreign agencies.

 

However, Zaazou did not give further information about how the funds would be distributed.

 

The Egyptian government raised the prices of three widely-used state-subsidised fuels — 80 octane gasoline, 92 octane, and diesel fuel – by up to 78 per cent earlier this month.
 

The move is part of a larger effort to rein in Egypt’s budget deficit to 10 per cent of GDP in the current fiscal year by cutting LE44 billion in spending on energy subsidies, among other measures.
 

Expectations for a higher value dollar as well as an anticipated rise in demand among Egyptian tourism in the winter season could contribute to reducing the sector’s losses, said Zaazou.
 

Noting the fact that 80 per cent of world tourism and travel is organised via the internet, the minister announced that the government would collaborate with tourism agencies to develop electronic infrastructure for the whole sector.
 

The tourism sector, which accounts for roughly nine per cent of GDP, has received several blows since a popular uprising forced president Hosni Mubarak to step down in 2011.
 

During the first half of 2014, around 4.4 million tourists visited Egypt, an appalling 25 per cent drop from the same period the previous year, reported state-run statistics agency CAPMAS.

 

 

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