Egypt's National Dialogue calls for rationalizing of public spending, borrowing

Muhammed Khalid , Tuesday 20 Jun 2023

Experts and party representatives at the Egyptian National Dialogue emphasized the importance of rationalizing public spending and reducing reliance on loans during a session on reforming the state's general budget on Tuesday.

The National Dialogue s session on reforming the state s general budget
The National Dialogue s session on reforming the state s general budget. Facebook.


Talaat Khalil, the General Rapporteur of the Public Debt, Budget Deficit, and Fiscal Reform Committee, pointed out that the budget deficit only covers 71 percent of public expenditure, stating that "We have a significant problem."

Khalil also noted that loan payments, totalling EGP 1.3 trillion ($42 billion) in FY2023/24, make up more than 28 percent of Egypt's GDP.

The Egyptian government expects the budget deficit to reach 6.9 percent of the GDP in the upcoming FY starting on 1 July.

An IMF report predicts that Egypt's general government gross debt will reach 92.9 percent of the GDP in 2023.

More revenue, fair spending


To tackle these challenges, participants stressed the need to increase revenue and ensure equitable spending.

"Fair spending is a necessity and the government should investigate who is the most impacted by the state's policies," Assistant Rapporteur of the economic track, Abdel Fattah El-Gebaly said.

Roshdi El-Agouz, the representative of the Conservatives Party, noted that taxes generate the majority of the general budget's revenue, which is EGP 2 trillion.

El-Agouz urged the government to adopt an austerity plan to maximize revenues for the state.

The Egyptian government anticipates a 28 percent increase in tax collection for FY 2023/24.

Banking expert Mohamed Shawki Soliman highlighted the importance of digital transformation to facilitate tax collection.

Overlapping roles


During the discussion, Rami Ramadan from the Justice Party drew attention to the issue of overlapping roles in the state's administrative body and shed light on what he called a "bad distribution of labour force in the state's administrative body."

Ramadan urged the government to maintain the current exchange rates and address overlapping roles between government entities, citing examples from the Ministries of Agriculture and Water Resources and Irrigation.

Tax waiver


Mervat El-Kassan, member of the Planning and Budget Committee at the House of Representatives, revealed that the Egyptian Tax Authority (ETA) has EGP 370 billion in overdue taxes, with EGP 125 billion being uncollectible, and only EGP 185 million being waived.

El-Kassan proposed forming a committee to waive uncollectible overdue taxes.

How should special funds be treated?


Former Minister of Supply and economist Gouda Abdel Khalek called for the speedy integration of special funds into the general budget.

Abdel Khaleq highlighted the issue of closed factories, estimating their number at 8,000.

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