ISLAMABAD: The State Bank of Pakistan (SBP) has received requests for Rs610.2 billion until Jan 7 under the Temporary Economic Refinance Facility (TERF) for setting up of new industrial units in order to support sustainable economic growth.

Of the requested amount, the approved financing has reached Rs293.5bn under TERF during the end-April to June 7, 2021 period, Commerce Adviser Razak Dawood said in a tweet on Wednesday.

The scheme, which was launched in March 2020, will come to an end on March 31, 2021. TERF provides long-term concessionary refinance at 5pc for manufacturers and exporters.

Mr Dawood said TERF has shown significant growth over the last nine months as reflected by an increase in the requested amount from Rs36.1bn by end-April 2020 to Rs610.2bn by Jan 7. Over the same period, the approved financing has reached Rs293.5bn from Rs0.5bn, the adviser further said.

Rs293.5bn has been approved under economic refinance facility

He said this scheme has brought substantial investment into Pakistan through the purchase of imported and locally manufactured plants and machinery for setting up new projects. “This clearly shows a willingness of our business community to invest when the government has the commitment through good policies,” Mr Dawood said.

The refinance under the facility is available through banks/DFIs to all sectors across the board except the power sector where SBP’s refinance facility for renewable energy projects already exists. The maximum limit is Rs5bn per project.

Mr Dawood said in another tweet that his ministry has approved an amount of Rs213 million for DLTL payments of non-textile sector. “These are now with SBP and will soon be disbursed to the relevant exporters”, he said, adding “our policy is not to put any working capital constraints for our exporters”.

“I hope that this will facilitate them,” the adviser further said.

Non-textile exports rise

Pakistan’s non-textile exports are slightly up 0.86pc year-on-year to $4.66bn in the first half of this fiscal year, latest data released by the Pakistan Bureau of Statistics (PBS) showed. However, the growth was only seen in the value-added textile products during the July-December period of 2020-21.

Three sectors — leather garments, surgical instruments, and engineering goods — have maintained growth in export proceeds despite lockdowns in many countries.

On Wednesday, leather garments manufacturers also met Finance Minister Dr Hafeez Shaikh to apprise him of the problems the sector is facing in the post-pandemic period. The minister assured that their issues including clearance of refunds would be resolved.

After a long time, leather exports also rebounded by 6.52pc, driven mainly by sales of leather garments, gloves, followed by other products. The exports of engineering goods went up 19.01pc and surgical instruments 3.11pc during the period under review. The exports of carpets and rugs slightly up in value by 0.77pc.

The data compiled by the PBS showed the food basket contracted 7.64pc in the July-December period from a year ago. Under this category, exports of rice witnessed a decline of 6.74pc. On the other hand, basmati exports dipped 31.03pc in value and 38.01pc in quantity.

Export of fish and fish products and vegetables also posted negative growth. How­ever, the exports of tobacco, meat, spices, and oil seeds recorded positive gro­wth during the period under review. No exports of wheat, sugar, and pulses following the imposition of a ban from the country in March.

Footwear exports went down by 5.03pc on the back of leather footwear and canvas footwear. The exports of sports goods went down 13.79pc with football dipping by 22.95pc. Tanned leather exports also plunged 30.79pc.

Year-on-year, exports of jewellery surged 123.5pc, gems 44.97pc, handicraft 100pc, and gur 1.7pc. However, the exports of furniture dipped 14.53pc, and molasses 73.21pc.

Published in Dawn, January 21st, 2021

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