(Photo from MOF)
The Ministry of Finance’s priorities in the next months are to stimulate the economy, contribute to finding solutions to unemployment, and reform the energy subsidies and wages systems, Minister of Finance Hany Qadry said Thursday.
“In order to achieve these goals, we must work on restructuring individual incomes,” Qadry said.
The new minimum income law, which took effect in January, guarantees EGP 1,200 a month to employees who work in ministries, government localities and service authorities. Public workers in several sectors held strikes over the past two weeks demanding to be included in the system.
More than three million Egyptians – 13.4% of the population – were unemployed during the fourth quarter (Q4) of 2013, according to the Central Agency for Public Mobilization and Statistics. This figure marks a 0.5% increase from Q3 2013 and a 57.3% increase compared to Q4 2010.
Qadry noted in a Thursday statement that the current energy subsidies system is “high and unreasonable, especially in a time when the country’s public resources aren’t sufficient to offer Egyptian citizens in poor areas a decent life”. The energy subsidies system, which reduces the prices of fuel and electricity for citizens, costs the state EGP 128bn annually.
In the coming phase, the government will focus on fiscal policies with social purposes “but without harming the balance of the state’s budget”, Qadry said.
“The social justice unit within the ministry will work actively in the next months to develop programmes and projects that benefit the social network in Egypt,” Qadry said, adding that his ministry is currently reviewing the pensions system in coordination with the Ministry of Social Solidarity, with the aim of strengthening the social safety net.
Along the same lines, former Prime Minister Hazem El-Beblawi issued Ministerial Decree 83/2014 in February forming a committee to study methods of strengthening the social safety net in order to match “the government’s policy to target the neediest category of society”.
Qadry also said the Ministry of Finance’s Public-Private Partnership Central Unit will accept four project proposals to develop Port Safaga in south of Hurghada, the technological zone in Maadi, and the river bus service in Cairo. The ministry also hopes to electronically connect notary offices all over Egypt.
While preparing the general budget for the next fiscal year, the ministry will consider increasing public spending on education, health and scientific research, Qadry said.
Egypt’s new constitution, ratified on 18 January, stipulates increasing expenditure on the health sector to 3% of the country’s gross domestic product (GDP). Spending on the education sector and scientific research sectors should increase to 4% and 1% of GDP, respectively.
