Mohamed Maait, Minister of Finance: Viewpoint

Viewpoint: Mohamed Maait

In an implementation of presidential directives, the support and social protection allocations have been increased to LE356bn ($22.6bn) in the new draft general budget. The Covid-19 pandemic and the challenges brought about by the war in Ukraine have created an unprecedented inflationary wave. This initiative will support the sectors and groups most affected by the current global context.

We will overcome this with the solid will and strong determination of the government and our people. We will turn the challenges into promising opportunities for the progress and development of our country, which is based on science, hard work and hope for a better tomorrow. We wish for everyone to enjoy the fruits of comprehensive and sustainable development, reflected in an improved standard of living and the provision of a decent life for citizens.

LE400bn ($25.4bn) has been allocated to the wages section of the new budget draft – an increase of nearly LE43bn ($2.7bn) – to improve the incomes of 4.5m state employees. In addition, LE191bn ($12.1bn) has been allocated to finance the increase in pensions at an annual cost of LE38bn ($2.4bn) and an additional cost of LE8bn ($508.3m) is dedicated to the period from April to June 2022. This will benefit 10m pensioners and their beneficiaries. LE1bn ($63.5m) has also been set aside to shore up the supply of food commodities to ensure the availability of bread for about 71m citizens. LE22bn ($1.4bn) has been dedicated to increase the funds for solidarity, dignity and social security schemes for 4m families. LE3.5bn ($222m) has been devoted to delivering natural gas to 1.2m homes, and LE8bn ($508m) to finance social housing initiatives.

Despite the ongoing global challenges, spending on human development has been prioritised with LE310bn ($19.7bn) allocated to health, LE476.3bn ($30.3bn) to university and pre-university education, and LE79.3bn ($5bn) dedicated to scientific research.

In the context of an exceptionally turbulent global economic scene, it is important to stress that the government is working to achieve ambitious goals during the 2022/23 fiscal year. We aim to record a primary surplus of LE132bn ($8.4bn) and reduce the total deficit to 6.1% of GDP, compared to 12.5% at the end of June 2016. This will put the debt rate on a sustainable downward path to reach less than 75% of GDP over the next four years.

Rationalised budget expenditure and efforts to diversify funding sources to reduce the cost of development and extend the life of debt will lay the foundations for a suitable environment for rapid economic recovery from the current global environment. The government will also ensure the completion of infrastructure construction and related development to improve the lives of citizens further.

We are keen to continue implementing major structural reforms to stimulate investment and increase the private sector’s contributions to economic activity during the next fiscal year. These initiatives will help to diversify production patterns and localise industry to raise the GDP growth rate, provide job opportunities and maximise exports. This, in turn, will lead to the preservation of the country’s safe economic path amid wider global challenges. These measures will also help in preserving the gains that Egypt has achieved in recent years through the elaborate implementation of the economic reform programme.

It should be noted that LE5bn ($318m) and LE1.5bn ($95.3m) were allocated to bear the financial burden resulting from reducing electricity prices and real estate taxes on the industrial sector, respectively, with a commitment to providing quick financial relief to exporters. LE6bn ($381m) was allocated to continue financing the export support programme to provide the cash needed to complete the production cycle and stimulate exports.