Egypt's new 2023/24 budget to prioritise spending on social safety net programmes

Gamal Essam El-Din , Sunday 12 Mar 2023

Egypt’s finance ministry is currently putting the final touches on the new FY 2023/24 budget and will refer it to the House of Representatives in the last week of March, Yasser Omar, deputy chairman of the Egyptian House of Representatives' Budget Committee, said on Sunday.

File photo: Egypt s House of Representatives. Al-Ahram
File photo: Egypt s House of Representatives. Al-Ahram


Finance Minister Mohamed Maait announced last January that the government would conduct a public dialogue on Egypt's new FY 2023/24 budget in a bid to reach national priorities on public spending.

"This dialogue is in line with presidential directives as the world is passing through a global economic crisis that has caused soaring levels of inflation and disruption of supply chains," said Maait, indicating that "the proposed dialogue will include MPs, senators, representatives from the Federation of Chambers of Commerce, the Federation of Egyptian Industries, the Export Councils, the Investors' Union, and the Businessmen's Associations."

Maait said the main objective of the proposed dialogue is to achieve a fair distribution of budget allocations that shall consider both the necessity of achieving higher economic growth rates and mitigating the impact of soaring inflation triggered by the global economic crisis on vulnerable classes.

Omar said he expects the new budget to expand on social safety networks in line with President Abdel-Fattah El-Sisi’s new package of measures, including wage hikes, pension increases and tax breaks.

"We expect an initial increase between EGP 150 billion and 200 billion in the new FY's 2022/23 budget, and that this is largely due to President El-Sisi's new social support measures, which also include greater allocations to Takaful and Karama programme, and to the education and health sectors," said Omar, indicating that "there is a general consensus among MPs that the new budget should prioritise social spending in order to help the public bear the high cost of living."

Prime Minister Mostafa Madbouly said following the cabinet's weekly meeting on 8 March that President El-Sisi's new social package will cost the state treasury an initial EGP 190 billion, EGP 40 billion of which to cover the remaining quarter of the current FY 2022/23, and EGP 150 billion in the new FY 2023/24.

President El-Sisi's new social package initiative, announced on 1 March, states that all government employees and public sector workers will receive a minimum EGP 1,000 increase to their monthly salaries, and a hike in the minimum wage for public sector employees to EGP 3,000 a month, up from EGP 2,700. 

Pensions will also rise by 15 percent, while the income tax exemption threshold will be raised to EGP 30,000, up from EGP 24,000.

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