On Monday, Minister of Finance Mohamed Maait and Minister of Planning and Economic Development Hala El-Said are scheduled to deliver two statements on the country’s 2022/23 budget and socio-economic development plan.
According to Egypt’s 2014 Constitution, the new budget should be submitted to the House before the end of March of every year. The House voted in a plenary session on 17 April to send the draft 2022/23 budget and development plan to the Budget Committee to discuss it in hearing sessions.
Yasser Omar — deputy chairperson of the House of Representatives’ Budget Committee — said the committee will schedule a series of hearing sessions to review the new budget and the statements that will be delivered by Maait and El-Said on Monday.
Egypt’s Prime Minister Mostafa Madbouly revealed at the end of March that the government would submit a revised budget to parliament.
“The 2022/23 budget was revised to prioritise social protection programmes targeting poor and limited-income classes,” said Madbouly, adding that “in Egypt, as elsewhere, the increase in basic commodity and oil prices on the back of the war in Ukraine has forced the government to rethink its fiscal policy and revise the budget to meet the new challenge.”
According to the Ministry of Finance’s report, the FY2022/23 draft budget was restructured to increase allocations to social programmes and subsidies. “This increase comes to protect the poor and limited income classes from the negative economic impact of the war in Ukraine,” said the report.
Preliminary figures show that budgetary allocations to subsidies, grants, and social protection programmes will be increased from EGP 321.3 billion in the current 2021/22 budget to around EGP 356 billion in the new 2022/23 budget.
The report indicated subsidies in the new budget will mostly go to fuels, basic supply commodities, exports, farmers, developing Upper Egypt, health insurance, and low-cost housing.
According to the draft 2022/23 budget report, “fuel subsidies are at the top, as they will be increased from EGP 18.4 billion to EGP 28.9 billion.” As for subsidies for basic supply commodities, they will be increased from EGP 87.2 billion to EGP 90 billion.”
As for budgetary allocations to grants, the report said they will be increased from EGP 9.9 billion to EGP 35.6 billion.
“Grants, like subsidies, will be also directed to shore up the social safety net and protect poor and limited income classes from any expected high inflation rates,” said Omar.
The FY 2022/23 draft budget also states that allocations to social protection programmes will reach EGP 159.7 billion, with most of this amount representing the state’s contributions to pension and social insurance funds.
“This includes the Takaful and Karama pension fund, which will be increased by EGP 3 billion to cover an additional 500,000 poor families,” said the report.
Maait further explained that while the budget seeks to support the most vulnerable and promote fiscal discipline, it will also act to stimulate productive investment, preserve economic stability, and “support national growth driven by the private sector”.
For her part, El-Said indicated that before the war in Ukraine, the government had expected economic growth to reach 6.2 percent in FY2022/23 but had downgraded the assessment to 5.5 percent in the revised 2022/23 budget. Public investment was similarly downgraded from 16.2 percent to 15.2 percent.
Furthermore, Maait told the cabinet in the last week of March that in the medium term, the revised budget targets economic growth of 5.5 percent, a budget deficit cut to 6.1 percent of GDP, and a reduction in public debt to 80.5 percent of GDP in 2022/23.
El-Said also said the finance and planning ministries would continue to work to contain inflation caused by the war in Ukraine and develop policies sufficiently flexible to absorb any shocks.
“I think MPs’ primary interest will be to determine how the new budget will protect the poor and how it will impose fiscal discipline,” said Omar.
“MPs will also want to see details of increased spending on the Takaful and Karama social protection programmes, details of continued spending on bread subsidies, and just how the authorities will respond to unscrupulous traders who seek to exploit the crisis to increase their own profits,” he added.
The House’s schedule on Sunday will be focused on discussing two reports, the first of which is on a government-drafted law regulating El-Zahraa Station for Raising Authentic Arab Horses.
The second report is on a loan agreement between Egypt and the International Fund for Agricultural Development (IFAD) on setting up a sustainable agricultural development project in Upper Egypt.
In addition to listening to Maait and El-Said’s statements on the 2022/23 budget and development plan on Monday, the House will also review two foreign agreements, the first of which aims to raise Egypt’s financial contribution to the paid-up capital of the African Development Bank (ADB).
The second is related to technical cooperation between the Agence Francaise de Developpement and the government for implementing a comprehensive health insurance system in Egypt.
On Tuesday, the House’s session will cover a large number of questions and information requests directed by MPs to Minister of Local Development Mahmoud Shaarawy, including complaints regarding the spread of garbage and refuse dumps on streets, the government’s failure to pave streets in major cities and towns, and the suspension of construction licenses.