Finance Minister announces: Despite COVID-19, the new FY general budget raises citizens' standard of living.

• All society categories benefit from development efforts. Activities to improve infrastructure and utilities are in progress.
• Government supports productive activities and COVID 19  highly vulnerable categories… to boost the national economy.
• Government targets achieving a growth rate of 5.4% of GDP, an initial surplus of 1.5% and a decrease in public debt to reach 6.7%.
• Expenditures in next FY are worth EGP 1.8 trillion, while revenues stand at  365 trillion .
• Government investments surged by an unprecedented 27.6% increase in order increase spending on development projects.
• "Export Support" initiative sums amounted up to EGP 4.2 billion in an attempt to provide export companies with liquidity and to maintain their manpower.
• EGP 10 billion allocated to support natural gas and electricity prices for industry, and EGP 2.1 billon for "transforming old vehicles to gas-engine operated ones"
• Salaries increased by 11.4% to reach EGP 361 billion as compared to the present FY forecasts, as a means to improve public employees' standard of living.
• EGP 2.5 billion allocated to development incentive of pre-university education, and EGP 1.5 billion for employees to be transferred to the New Cairo Administrative City.
• Quality incentive increased by half billion for university staff and their assistants at universities, institutes and research centers.
• EGP 321 billion allocated for subsidies:  EGP 87.2 billion for food supplies, EGP 19 billion for Takaful and Karama pensions, EGP 7.8 billion for instant cash support and for utilities of social housing projects.
• EGP 180 billion allocated for the payment of annual installment of Insurance and Pension Fund to put in effect the financial entanglement settling agreement.
• EGP 7 billion allocated for treatment on the State's account, and for proceeding with the comprehensive health insurance project in 5 governorates.

 

As a preliminary step towards holding discussions and adopting the relevant measures, the government has submitted to the Parliament 57 laws related to "connecting budgets" for the new fiscal year as follows: a law for connecting the State general budget, 55 laws for economic authorities, and a law related to the National Organization for Military Production.

On his part, Minister of Finance, Dr. Mohammed Maait, confirmed that the new State general budget draft law for FY2021/22 translates the presidential directions to maximize public spending to raise citizens' standard of living and to upgrade public services amid challenges imposed by Corona pandemic.

Indeed, the government is proceeding with activities to overhaul infrastructure and utilities,  to enhance human resource developments at the health and education sectors in particular, as well as to support some national projects (as the national project for the Egyptian countryside development). In parallel, efforts are made to back up productive activities and Corona most affected categories, all without prejudice to the sustainability of  the budget and debt indicators.

To boost national economy, the government targets achieving a mid-term growth rates of 5.4% of GDP, decreasing public debt to 6.7% of GDP, registering an initial surplus of 1.5%  as means to guarantee stability levels of budgetary entities' debt to GDP, said Dr. Maait.

In his statement before the Parliament on the occasion of presenting the financial statement of FY 2021/22 general budget, Dr. Maait illustrated that the  expected total expenditures of the  State general budget (including the State administrative body, the local administration and public and service authorities) stand at EGP 1.8 trillion against revenues  of EGP 1.365 trillion.

Financial allocations for public investments increased significantly by 27.6% to value EGP 358.1 billion in order to upgrade public services. This comes in abidance by the President's directions to increase public spending on development projects in a way that can accelerate the implementation of "Egypt Vision 2030" objectives for a comprehensive and sustainable development.

EGP 10 billion are allocated for subsidizing gas and electricity prices for the industrial sector, whereas EGP 2.1 billion are allocated for the initiative related to transforming old vehicles with natural gas-operated ones.

In the same context, the minister stated that EGP 4.2 billion are allocated for supporting exports, and EGP 6 billion for the payment of   the installment of "early cash payment initiative", 85% of exporters' due arrears. This measure aims at supporting the export sector amid Corona outbreak, as well as providing companies with liquidity to enable them pay their liabilities and keep their work force.   The 2^nd phase of "Gov't instant cash support" Initiative for export companies was launched in 7 February 2021 and witnessed increasing interest, noted the minister.

By virtue of the Social Insurance and Pensions Law No. 148/2019, and subject to the financial entanglement settlement agreement signed with the Ministry of Solidarity, EGP 180 billion were allocated for the payment of the annual installment  due for the Insurance and Pension Fund, in order to provide  the same with the liquidity necessary for its liabilities towards pensioners, stated the minister.

The new FY budget draft law comprises of increases to employees' salaries and compensations by EGP 361 billion, 11.4% higher than the current FY estimates.  Lion share of the said increases targets employees of  medium job ranks and those at the health and education sectors. Moreover, employees to be transferred to the New Cairo Administrative City will receive incentives and allowances of total costs of EGP 1.5 billion.  EGP 2.5 billion are allocated for development incentives for pre-university and Al-Azhar education from  kindergarten up to 4^th primary grades. Quality  incentive also  increased by  half billion for university staff and their assistants at universities, institutes and research centers, clarified the minister.

The new budget draft law allocates EGP 321 billion for subsidies, including : EGP 87.2 billion for food supplies, EGP 19 billion for Takaful and Karama pensions  in form of a monthly cash support to more than 3.6 million low-income families, EGP 7 billion for treatment on the State's expense and EGP 7.8 billion for instant cash and utilities upgrade initiatives. Included also are allocations for expanding the comprehensive health insurance system across Luxor, Aswan and Ismailia governorates, detailed Dr. Maait.