On Tuesday, Ahmed Kouchok delivered his first statement to the House of Representatives since being named finance minister in July.

Reviewing his first 100 days in office, Kouchok said the Finance Ministry’s agenda would be dominated by four priorities until 2030.

They include strengthening trust between the Tax Authority and the business community, to which end the ministry is taking steps to resolve historical tax disputes, simplify the tax framework and implement business-friendly fiscal policies with a comprehensive tax facilitation package that will be announced soon. Since the package requires legislative amendments to be in force by the end of next June, once it has been approved by the government it will immediately be sent to the House for discussion and a final vote, said Kouchok.

According to the minister, the new package will create an integrated tax system “that will offer incentives, facilities, and privileges to small businesses and startups to give them the chance to grow and boost their contribution to the national economy”. Tailored to businesses with an annual revenue not exceeding LE15 million, it will benefit small and micro businesses, enterprises, entrepreneurs, professionals, and freelancers, and encourage the integration of informal businesses into the formal economy.

The second priority announced by Kouchok is to achieve fiscal discipline and stimulate private sector-driven economic growth and increased exports and manufacturing. The Finance Ministry will allocate LE7 billion to support the export sector in the first quarter of FY 2024-25 to raise the competitive and productive edge of Egyptian exports, said Kouchok. He highlighted the recently announced car manufacturing programme which has already received LE1 billion in support from the Finance Ministry to increase local production of cars as an example.

Simultaneously, the government will ensure that public investments do not exceed LE1 billion in funding, “reducing state intervention in the economy and opening the door to the private sector to boost its contribution to the national economy to more than 65 per cent by 2030.”
The Finance Ministry’s third priority is debt. Kouchok explained that in 2024 external debts for which the ministry is responsible decreased by more than $3 billion to $79 billion and that public debt fell to 89.6 per cent of GDP in June 2024, down from 96 per cent a year earlier.
Kouchok told MPs that dollar receipts from the UAE-funded Ras Al-Hekma deal had helped build net foreign exchange reserves and that the $12 billion in UAE deposits that are being converted to Egyptian pounds as part of the $35 billion Ras Al-Hekma deal had helped reduce Egypt’s debts.
According to Central Bank of Egypt figures the conversion has reduced the bank’s net foreign liabilities by around three per cent of GDP.

“In dollar terms, total external debt fell from a peak of $168 billion in FY 2022-23 to $153 billion in FY 2023-2024,” said Kouchok.
CBE figures show that medium and long-term debt accounts for 83 per cent of Egypt’s total foreign debt, amounting to $126.9 billion, while short-term debt made up about 17 per cent, reaching $26 billion.

Kouchok said the fourth priority is to support social safety nets and improve living standards. He highlighted increased allocations to the health and education sectors — 33 per cent and 28.5 per cent respectively — to improve healthcare and educational services offered to citizens.
At the same time, said Kouchok, the Finance Ministry will continue spending on low-cost housing to help poor and limited-income citizens buy homes.

“The Finance Ministry is also committed to providing the Ministry of Electricity with funds to secure the fuel needed to operate power stations and ensure that the country does not face power outages,” said Kouchok. He also said Egyptian pound revenue from the Ras Al-Hekma had helped increase spending on the Takaful and Karama initiative which provides monthly payments to the poorest families.

* A version of this article appears in print in the 7 November, 2024 edition of Al-Ahram Weekly.