Towards better budgeting

Nahla Abul-Ezz, Tuesday 20 Sep 2022

Egypt’s national dialogue could work to improve the transparency and efficiency of the state budget



Making Egypt’s state budget more transparent and reflective of government spending priorities is one of the major issues to be discussed by the sub-committee on public debt, the budget deficit, and financial reform affiliated to the National Dialogue’s economic committee.

“We will aim to discuss this with the concerned parties in order to conclude a fair and transparent budgetary process,” said Talaat Khalil, secretary-general of the Egyptian Conservative Party and head of the sub-committee.

He said that the committee is concerned with fixing imbalances in the state budget, which could lead to increased spending. One way forward could be to integrate some ministries with others, such as education with higher education and planning with international cooperation, in order to arrive at efficiency savings.

The state budget reflects the spending and revenues of 655 entities, the expenses of which should be rationalised, Khalil said.

Another issue that should be discussed was the country’s debt, he said, adding that Egypt’s national debt stands at LE5 trillion and there is a LE1.5 trillion gap between spending and revenues, usually covered by debt.

Khalil said that sources other than further borrowing should be found to bridge this gap.

The committee will also look into the revenues side of the budget, he said, pointing out that revenues from taxes are expected to reach LE1.6 trillion in the new budget. At the same time, the government is owed LE465 billion in back taxes that should be collected.

Khalil said it was important to increase public-sector wages in the new budget, currently set at LE400 billion. The sum was not enough, and it was imperative to raise wages to alleviate burdens as a result of rising inflation, he added.  

Although spending on social protection is slated at LE336 billion in the new budget, it should be increased to cover families most in need. “The committee has to come up with recommendations that meet the aspirations of the people. We want to alleviate the people’s burdens, especially amid the currently skyrocketing prices,” Khalil said.  

Amr Al-Monayer, a former deputy minister of finance for tax policies, said the national dialogue was neither a goal nor a panacea, but rather a means of political communication. It was an ongoing process that should be organised as a form of democratic practice, he said.

“In democratic systems, there are widely recognised principles for the success of a national dialogue, the most important of which are careful preparation, inclusiveness, transparency, and public participation,” Al-Monayer said.

“There should be a long-term agenda, clear procedural rules, and an appropriate and effective implementation plan.”

Al-Monayer, who is not a member of the dialogue’s sub-committees, added that the national dialogue must reach consensus on adopting a strategy to rationalise spending and increase revenues to reduce the fiscal deficit and achieve a stable financial and economic environment and sustainable economic growth.

This would include setting clear and specific tax policies for both the short and longer term, simplifying the tax system, and eliminating complications in laws and procedures, he explained.

There should be a vision to raise economic growth over the next 10 years to eight per cent, up from 3.3 per cent in 2021, and increase investment rates to 25 to 30 per cent, he said.

President Abdel-Fattah Al-Sisi, who called for the convening of the national dialogue, had said its recommendations should be applicable on the ground, Khalil said.

He added that assigning opposition figures to head dialogue committees reflected positively on the seriousness of the event and the keenness to listen to views from across the political and economic spectrum.

   *A version of this article appears in print in the 22 September, 2022 edition of Al-Ahram Weekly.

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