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Egypt overturns its decision on banning imported cotton

Egypt's reversed its a week-old ban on imported cotton. This spells wider policy problems that affect the country feel experts. The cabinet abruptly vetoed the idea after the agriculture ministry banned cotton imports to help local producers. Egypt, is struggling to re-energise its economy and attract foreign investment after years of turmoil since 2011. President Abdel Fattah al-Sisi has imposed some tough reforms to help Egypt’s economy. The IMF has appreciated him for such policies as reducing fuel subsidies, which swallowed up huge parts of the state budget. However, he has focused much of his economic policy on mega-projects such as extending the Suez Canal and a planned new capital city.

The agriculture ministry said it was keen on Egyptian cotton regaining its glory on all levels and thus banned imports to boost local production. However, after just eight days, it reversed the ban without giving any reason apart from stating that it was in the context of developing cotton farming and supporting its farmers. Egypt has been known for its high quality and extra long staple cotton. However, the output has been shrinking for years.

Now, volte-face by the government has raised doubts about its commitment to revive the industry. William Jackson at Capital Economics said that the ban has added to a general sense that Egyptian policymaking seems erratic and not much analysis has gone into it before implementation. He added that this erratic policymaking made it difficult for investors to plan ahead.

 
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