Egypt Eyes Highest Primary Surplus of 2.5% in 2023/24 Budget

Mohamed Maait, Minister of Finance confirmed that the Cabinet approved the draft budget for the next fiscal year 2023/24, which comes under exceptional circumstances in the global economy, and imposes extremely difficult pressures on the budgets of countries, including Egypt, both in terms of the unprecedented rise in prices of goods and services; as a result of the disruption of supply chains, or the high cost of financing.

The minister pointed out that financial allocations for public investments witnessed an unprecedented increase in the new budget, especially the self-financed budget, to reach EGP 306 billion out of total public investments amounting to EGP 586.7 billion, up from EGP 376 billion, with an annual growth rate of 55.9%; to create new jobs and improve services provided to citizens.

The minister added that the state’s general budget, including the state’s administrative apparatus, local administration, and public service agencies has total expenditures, according to estimates for the next fiscal year, about EGP 3 trillion, with an annual growth rate of 44.4%.

While the estimated total revenues amount to EGP 2.1 trillion, with an annual growth rate of 41.2%, tax revenues are expected to increase by 31.1%; as a result of expanding the tax base and registering new financiers.

The budget will also expand the social protection network, dealing with the effects of international and domestic economic challenges; in a way that contributes to limiting the repercussions of the global inflationary wave on citizens as much as possible; especially the most needy, along with completing the process of building the new republic; which is based on the continuation of the implementation of the presidential initiative “Decent Life”, the largest project in the history of Egypt, and the completion of the first phase.

The start of the second phase of the development of the Egyptian countryside, improving the lives of 60% of the Egyptians who live there, increasing spending on health and education, and expanding effective programs in these two vital sectors.

The minister indicated that allocations for university and pre-university education and scientific research were increased in the next fiscal year’s budget by EGP 48.6 billion to reach EGP 305.2 billion with a growth rate of 19%.

Allocations for the health sector were also increased by EGP 13.3% billion to reach EGP 111.2% billion, with a growth rate of 14%.

As the performance incentive for teachers in Education and Al-Azhar was raised by EGP 300 per month, and the quality incentive for faculty members and their assistants in universities and research centers was increased by also EGP 300 per month.

Increasing the risk allowance for medical professions with financial categories ranging from EGP 400 to 475 for doctors and nursing staff, with doubling the categories of night shifts, overnight shifts, and the emergency incentive; to ensure the provision of educational and health services in a distinguished manner.

The minister said that we are committed to meeting the needs of citizens, reducing the effects of inflation on them, and achieving economic and financial goals as well.

The primary surplus is expected to reach 2.5% of GDP; the highest primary surplus targeted as part of the efforts to reduce government indebtedness to the GDP, recording a deficit rate of about 6.9%.

This is done by maximizing the efforts of financial discipline, the competitiveness of the Egyptian economy, improving the business environment and simplifying procedures to stimulate investment.

Achieving a growth rate of 4.1% of the gross domestic product (GDP), by boosting productivity rates and supporting structural reforms so that the private sector leads the development engine and provides more productive job opportunities.

He pointed out that EGP 28.1 billion has been allocated to support and stimulate exports, with an annual growth rate of 368.3%, which contributes to the speedy disbursement of dues to exporters within 3 months, in a way that helps provide cash liquidity that drives productive activities, and enhances the penetration of Egyptian products into global markets. 

Also, EGP 19.5 billion has been allocated to support industrial and agricultural productive activities.

The minister explained that, according to estimates of the new draft budget, allocations for subsidies, grants, and social benefits increased to EGP 529.7 billion, or 48.8%, including EGP 127.7 billion to subsidize food commodities, at an annual growth rate of 41.9%, and EGP 119.4 billion to subsidize petroleum products.

Up to EGP 6 billion pound were allocated for health insurance and medicines, an increase of 58.2% over the current fiscal year.

Moreover, EGP 10.2 billion were allocated for housing support for “low-income and social housing” at an annual growth rate of 31.5%, EGP 31 billion for social security pension at an annual growth rate of 25%, and EGP 202 billion for contributions to pension funds, with 6% annual growth rate, and more than EGP 8 billion for the treatment of citizens at the state’s expense, at an annual growth rate of 14.3%.

Finally, the budget for the next fiscal year also includes the allocation of EGP 470 billion for wages at a growth rate of 17.5% for the current fiscal year to improve the conditions of state workers.