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Tuesday, 10 December 2019

Egypt to finally see 2012/13 draft budget this week

The proposed budget for 2012/13 - already over a month late - will be presented for parliamentary approval within days; some experts are predicting wide-ranging reforms

Ahmed Feteha, Tuesday 8 May 2012
Egypt cash
Egypt awaits new budget with bated breath (Photo: Reuters)
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Egypt's speaker of parliament Saad El-Katatni has said he will pass the 2012/13 state budget to parliament for review within 48 hours, Al-Ahram newspaper reported on Monday.
 
The budget is already over a month late. The law stipulates that the executive power must hand the draft budget to parliament 90 days before the beginning of the financial year on 1 July – meaning it was due by 1 April.
 
El-Katatni said he had received a promise from the ruling military council that the crisis between the parliament and cabinet -- sparked when MPs rejected the government's economic and political programme in late April -- will be resolved in a few days.
 
"We will find a solution regarding a cabinet reshuffle or the resignation of the government as well as presenting the state budget in 48 hours at most," El-Katatni was reported as saying by Al-Ahram.
 
Egypt's Minister of Planning and International Cooperation, Fayza Abul-Naga, was reported by several publications on Saturday as saying that the budget would be presented to parliament in a matter of "weeks."
 
She added that the delay in finalising the budget was due to problems preparing the "investment plan."
 
A source inside the Ministry of Finance, speaking on condition of anonymity, explained that there was no specific reason for the delay. 
 
"Just bear in mind that this is the start of a new five-year plan and it takes time," the source said.
 
Another source in the ministry, also requesting anonymity, said the political situation and the complex relationship between parliament and the ruling military was behind the delay.
 
"There are major changes in the budget but I don't know their nature. The minister [Momtaz El-Saeed] is handling everything himself this year," the source said.
 
For her part, Magda Kandil, the executive director of the Egyptian Centre for Economic Studies (ECES), speculated that the delay might be due to negotiations with the International Monetary Fund (IMF) over specific items in the budget.
 
"This year's budget would be the basis for any current or future deal with the IMF," Kandil explained.  "Items such as subsidies and taxation are probably being hotly debated now."
 
MPs, especially from the Muslim Brotherhood's Freedom and Justice Party (FJP), have blasted the economic reform programme presented by the cabinet to parliament in mid-March.
 
At the time, Saad El-Husseiny, head of the parliamentary budget and planning committee, said the plan failed to answer urgent questions about the direction of Egypt's economy.
 
The situation echoes disputes over the 2011/12 budget, when the ruling Supreme Council of the Armed Forces (SCAF) made changes to the document 24 hours before it was due for final approval. 
 
The budget was initially prepared by the then finance minister, Samir Radwan, as an expansionary budget contingent on a $3.2 billion loan from the IMF. 
 
The SCAF, who held legislative and executive power at the time, decided to reject IMF borrowing and adopted a more stringent budget with a smaller deficit.
 
Radwan was replaced as finance minister shortly afterwards.
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