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Thursday, 24 May 2018

Egypt's budget: More transparency needed

Egypt’s score on the Open Budget Index significantly improved in 2017, but the country still suffers from weak public participation and budgetary oversight

Nesma Nowar , Thursday 8 Feb 2018
Egyptian ministry of finance
Cairo's headquarters of the Egyptian ministry of finance (Photo: Al-Ahram)
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Egypt scored 41 out of 100 for transparency in the 2017 Open Budget Index (OPI), an independent measure of government budgetary transparency. The score is a significant leap forward compared to the country’s score in 2015, which stood at 16.

The Open Budget Index, developed by the International Budget Partnership (IBP), a NGO, uses 109 equally weighted indicators to measure budgetary transparency.

These indicators assess whether the government makes eight key budgetary documents available to the public online in a timely manner and whether these documents present budgetary information in a comprehensive and useful way.

The IBP says that since 2015 Egypt has increased the availability of its budgetary information by publishing some of the key documents, but it still offers limited availability of information by not making other documents available to the public.

It recommended that Egypt take certain actions to improve budgetary transparency, including by publishing a mid-year review, a year-end report, and an audit report online.

It also urged the country to increase the information provided in its official budgetary proposals by improving information on performance and policy and by increasing data on expenditure by publishing both the budget’s yearly and multi-year estimates.

Besides transparency, public participation is also vital to realise the positive outcomes associated with greater budgetary transparency, the IBP said. Egypt scored 11 out of 100 in terms of public participation.

To measure such participation, the index assesses the degree to which the government provides opportunities for the public to engage in budgetary processes. “Egypt’s score of 11 out of 100 indicates that it provides few opportunities for the public to engage in the budget process. This is lower than the global average score of 12,” the IBP said.

However, Egypt, along with Jordan, was the best performer in this regard when compared to other countries in the Middle East and North Africa (MENA) region, with Qatar and Tunisia scoring a meagre two, while all the other countries in the region, including Saudi Arabia, Lebanon, Algeria and Morocco, scored zero.

Budget Index

The IBP recommended that Egypt find mechanisms for members of the public and executive branch officials to exchange views on budgetary matters during both the formulation of the budget and its implementation.

It also recommended holding legislative hearings on the drafting of the country’s annual budget, during which members of the public or civil society organisations could testify. The findings further showed that Egypt has weak budgetary oversight by the legislature and audit institutions, scoring 39 out of 100.

“This score reflects the fact that the legislature provides weak oversight during the planning stage of the budget cycle and weak oversight during the implementation stage of the budget cycle,” the survey said.

The IBP examines the role that legislatures, audit institutions, and independent fiscal institutions play in the budgetary process and the extent to which they are able to provide effective oversight of the budget.

It identified main barriers that impede effective legislative oversight in Egypt, including the absence of debate on budgetary policy by the legislature before the tabling of proposals, a legislative committee that does not examine or publish reports on the proposals online, and a committee that does not examine or publish reports on in-year budgetary implementation online.

It said that Egypt should ensure that a legislative committee publishes online reports on budgetary implementation on a quarterly or monthly basis, require legislative or judicial approval to remove the head of the supreme audit institution, and consider setting up an independent institution to further improve budgetary oversight.

Budgetary transparency is an increasingly promoted norm of government accountability and effectiveness worldwide. Budgetary transparency helps citizens hold their governments accountable for spending priorities and the allocation of public funds.

Though Egypt still needs to take steps towards achieving a more transparent budget, the country scored the highest improvement on the OPI in the region over recent years.

It has started publishing more comprehensive in-year reports that include information on revenues collected and expenditures made and a year-end report that describes the situation of the government’s accounts at the end of the fiscal year.

Egypt also attempted the publication of a first citizen budget in 2010, the first country in the region to do so. A citizen budget is a simpler and less technical version of regular budget and is designed to convey key information to the public, according to the OPI.

Egypt embarked on a bold economic reform programme in 2014 that includes cutting energy subsidies and introducing new taxes, with the aim of trimming the budget deficit. In late January, the government revised its projections for the budget deficit for the 2017-2018 fiscal year, expecting it to reach 9.4 per cent of GDP and up from previous projections of about nine per cent.

The rise is due to an increase in global oil prices and high local interest rates.

 * This story was first published in Al-Ahram Weekly

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