Egypt's parliament approves EGP 165 bln to fund Sisi's new package of wage, pension hikes

Gamal Essam El-Din , Tuesday 21 Mar 2023

Egypt's parliament – the House of Representatives – approved Monday a bill amending the current FY2022/23 budget to earmark an additional EGP 165 billion to fund President Abdel-Fattah El-Sisi's new package of wage and pension hikes and social protection programmes.

File photo of the Egyptian Parliament (Photo: Khaled Mashaal)


The package, announced by President Abdel-Fattah El-Sisi earlier this month, will increase the salaries of government employees and public sector workers by EGP 1,000 starting 1 April. It will also increase pensions by 15 percent and allocations to the Takaful and Karama social support programmes by 25 percent.

This package will be funded "from borrowing, issuing financial securities and other local and foreign financial sources," according to the newly approved bill.

"The challenges Egypt is currently facing due to the global economic crisis triggered by the Russia-Ukraine war has prompted President El-Sisi to introduce a new package of social protection measures which will cost EGP 165 billion," said Chairman of the House's Budget Committee Fakhri El-Fiqi.

"These measures are the best at the moment and would help mitigate the impact of soaring inflation on vulnerable classes," he added.

Yasser Omar, deputy of the Budget Committee, explained that "it is important to note that the new EGP 165 billion allocation will only cover the remaining quarter of the current FY2022/23 budget. This new allocation will fund wage hikes totalling EGP 10 billion, social protection programmes amounting to EGP 70 billion, and debt servicing costs of EGP 85 billion."

Ihab El-Tamawy, deputy chairman of the Legislative and Constitutional Affairs Committee, clarified that according to Article 124 of the constitution, the government is allowed – in consultation with the House of Representatives – to draft a bill amending the budget to increase expenditures in the form of earmarking to cover urgent financial obligations.

"After the approval of President Abdel-Fattah El-Sisi's new package of wage and pension hikes, it became necessary to approve the new budgetary allocation to cover the expenses related to this package," said El-Tamawy.

Ehab Abu Eish, deputy minister of finance for treasury affairs and public services, said "it is important to note that the budget will continue to fund other social obligations, including subsidising electricity consumption for low and average-income households, bearing the high cost of world wheat imports, and subsidising housing and health insurance."

Abu Eish's comments came in response to criticisms from some leftist MPs who accused the government of not doing enough to help vulnerable classes.

Leftist MPs Mona Abdel-Nasser, Diaaeddin Dawoud and Mostafa Bakri have criticised the new wage and pension hikes as insignificant in light of last month's inflation rates jump to 40 percent.

"These wage and pension hikes will meet the needs of low and average-income families for one week only," said MP Mostafa Bakri.

MP Mona Abdel-Nasser added that "government officials keep blaming global crises for their failed policies and refuse to admit that their inefficient performance and adoption of liberalisation policies imposed by the IMF are to blame for the deteriorating conditions of poor and limited-income classes."

Moreover, she called for a vote of confidence in the government of Prime Minister Mostafa Madbouly.

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