(AFP Photo)
The government has approved an economic reform package worth EGP 29.6bn, mostly made up of investments, according to a statement by the Minister of Finance.
Sources within the Ministry of Finance have said that allocations for investment in the new package are worth EGP 16bn, in addition to the EGP 61bn allocated in the current fiscal year’s budget.
Wages received EGP 2.6bn in order to cover the legislation for temporary work status in the public sector and for physicians. Likewise, allocations for goods and services, a special section for the administration of the bureaucracy, will be increased by EGP 700m in order to purchase food for schools and vaccines.
Despite the debate revolving around this the huge allocation for subsides in the state’s budget, the government will spend an extra EGP 6bn to deliver natural gas to 800,000 residential areas, equip industrial zones, subsidise baby formula, and cover student tuition fees.
Allocations for subsides amount to EGP 205bn in the current budget, including EGP 100bn for petrol products and EGP 30bn for basic food items.
The reason for the government’s large budget deficit is due to the increasing amount spent on subsides, which consume nearly one third of the budget.
According to the government’s original economic stimulus plan, public investments will be increased for the current fiscal year. EGP 16bn will be added to the EGP 61bn already included in the current budget.
According to AlBorsa, EGP 4bn pounds will be allocated to section 7 of the budget to pay government premiums, dues owed to contractors and suppliers, improvements to railroad crossings.
The Ministry of Finance said that the reforms would not add to the state’s current target of a 10% budget deficit due to the success of recent government reforms and the Arab aid package in lowering interest rates and treasury bonds by nearly 4%.
The government requested that the president, the current owner of legislative power, issue a decree to sanction the additional stimulus package.
The Minister of Finance said that the package allocates funds for a number of programs, such as dues owed to contractors and suppliers, improvements to railroad crossings, support for faltering factories, restructuring public sector companies, social housing, strengthening canals and bridges, a national project for sewage and drinking water, subsidising electricity, equipping industrial zones, delivering natural gas to 800,000 residential areas, increasing resources for a comprehensive development programme in Sinai, covering student tuition, and increasing the Ministry of Health’s budget to guarantee the provision of vaccines, baby formula, and improve conditions for health care workers.
