Egypt’s Financial Sector Reform Fund has been the subject of a fierce debate in the local media over the last few months, mainly due to its chairman’s refusal to allow the Central Auditing Agency (CAA) to audit its final financial statement.
The controversy was spurred after the CAA was denied access to audit the financial statement of the Financial Sector Reform Fund, chaired by Central Bank of Egypt Governor Farouq El-Okdah.
The case was then presented to the State Council, which recommended that the fund should be audited by the CAA as it comprises of public money.
Financing from the fund mainly comes from “up to 5 percent of the net profits of state-owned banks as well as funds from international grants to Egypt, according to Law 88/ 2003, which regulates the CBE and affiliated funds.
The law also regulates the Federation of Egyptian Banks Fund and the Banking Institute Fund. However, the Financial Sector Reform Fund was established by a decree from the Prime Minister, who receives and endorses the annual financial statements.
“Every CBE account should be overseen by the CAA, according to the law, Ismail Hassan, former CBE governor, told Daily News Egypt.
But if the account is subject to special regulations, as is the case of the Financial Sector Reform Fund, a decision to audit the fund is left up to the CBE governor.
Another point highlighted in the ongoing debate regarding the fund was the exorbitant salaries of the top management at public banks, such as the National Bank of Egypt. Local media reports claim that the NBE’s management is paid directly from the fund, not from the banks’ budget.
An article in Al-Masry Al-Youm described the situation at the NBE as a conflict between the old and new guard. The bank’s human resource manager Naglaa Qenawi was mentioned repeatedly in the media as earning an annual salary of more than LE 2 million.
However, when contacted by Daily News Egypt, Qenawi denied this figure, but no firm number was provided.
According to one insider at the bank, some newly appointed employees make between LE 25,000 and LE 30,000 a month.
Tarek Amer, former CBE deputy governor who has chaired the NBE for almost two years now, could not be reached for comment.
Allegedly, the current resources of the fund reached LE 200 million, out of which LE 48 million come directly from the CBE, Al-Masry Al-Youm reported.
