Egypt's Ministry of Finance has denied news reports that LE436 million of the country’s social insurance and pensions funds disappeared.

In an official statement the ministry said that in FY2006/2007, the treasury started issuing notes covering the larger part of insurance money, priced at 8 per cent. The government pays interest dues amounting to LE17 million annually in cash to the social insurance fund.

Before FY2006/2007, when the government began borrowing social insurance and pension funds, the money was invested in the deposits fund at an interest rate of 4.5 per cent, with the resulting funds financing social and economic projects via the National Investment Bank.

When it transpired that the social Insurance and pension fund did not have sufficient liquidity to cover its commitments, however, the government borrowed the money at a the higher pricing rate. Total monies in the fund amount to LE303.4 billion, out of which LE240.9 is held with the government and LE62 billion with National Investment Bank.

The ministry indicated that the government covers a large portion of the monthly payments pensioners receive, because actual subscription only covers 40 per cent of total payments.It added that the government has reimbursed the pension fund with LE217 billion over the past six years: LE128 billion in the form of direct support and LE89 billion in interest payments.

In mid-September, Egypt’s finance minister made a formal request to the Central Auditing Agency (CAA) to investigate allegations regarding the use of social insurance funds in government spending.

Recent media reports have accused the government of unlawfully confiscating social insurance funds to use in its annual budget. The government is also accused of inefficiently investing the funds.