The four political parties – the Egyptian Social Democratic Party, El-Tagamoa, Al-Adl and the Reform and Development Party – announced they have voted against the FY 2022/23 government-drafted budget that was approved by the House of Representatives on Tuesday.
The four political parties have around 30 seats in the 568-seat parliament, representing nearly six percent of the total.
At the end of a two-day debate in a plenary session on 21 June, the Speaker of the House Hanafy El-Gebaly announced that a majority of MPs had approved the budget and development plan, but declined to read out the names of political parties which refused to endorse the budget.
Mona Abdel-Nasser, head of the parliamentary group of the Egyptian Social Democratic Party, said the party had rejected the FY 2022/23 budget because it did not show that the government would stop foreign borrowing.
"The budget shows that the rates of foreign borrowing have reached an unprecedented level and that this has forced the government to declare its intention to sell public assets in return for writing off loans," said Abdel-Nasser, adding that "the value of the budget deficit has also reached half a trillion Egyptian pounds and that this is an alarming level."
Abdel-Nasser also complained that the development plan is giving priority to construction, transport and real estate sectors, at the expense of productive sectors like industry and agriculture.
"The plan shows that the government aims to invest EGP 500 billion, out of total 1,400 billion, in sectors of construction, transport and real estate activities, with an increase of 35 percent in spending, while investments directed to agriculture and industry have significantly decreased," said Abdel-Nasser.
Atef El-Meghawry, the head of the parliamentary group of the leftist El-Tagamoa party, also announced the party had voted "no" to the state budget and plan.
According to El-Meghawry, the new budget discriminates against the poor and is biased towards the rich. "The budget shows that the government insists on sticking to liberalisation policies which are biased for the rich and come at the expense of the poor.”
El-Meghawry also voiced concerns that the budget's forecasted international oil and wheat prices were too low and that this will increase the budget deficit. "For example, the budget set the oil price per barrel at $80, while the trading price on international markets currently stand at $105," said El-Mehgawry.
Abdel-Moneim Imam, MP and chairman of the Justice (Adl) party, also voiced rejection of the budget and plan.
According to Imam, the new budget and plan are not up to the ambitions of Egyptians. He said debt servicing costs have become too high, now accounting for 8.2 percent of GDP and this means a lot of debt burdens for generations to come.
"This is a budget to spend on servicing debts and not for spending on productive sectors or on healthcare and education," said Imam.
For different reasons, the liberal Reform and Development Party rejected the party upon the grounds that it is allocating too much money to subsidies. Ayman Abul-Ela, the parliamentary spokesperson of the party, deplored that the government had refused to scrap subsidies in favor of cash transfers.
"Cash transfers will help the poor much more than subsidies," said Abul-Ela.
Other opposition parties have approved the budget and development plan.
Al-Wafd, Egypt's longest-serving party, said it had voted "yes" to the budget even if it was not up to the ambitions of most Egyptians. "Amid the current economic global crisis, triggered by the coronavirus pandemic and the war in Ukraine, we think that this budget is the best option to tackle the negative impact of global economic crises on Egypt," said Al-Wafd's parliamentary spokesperson Soliman Wahdan.
The three parliamentary majority parties of Mostaqbal Watan (the Nation's Future), the Protectors of the Nation (Homat Watan) and the Republican People's Party, also voiced approval of the budget, stating that the government was able to weather the coronavirus crisis and that its fiscal discretionary policies will also help Egypt weather the Ukraine crisis.
The next step for the FY 2022/23 budget and development plan is to be ratified into law by President Abdel-Fattah El-Sisi before it goes into effect on the first of July.