Mohamed Maait, Egypt’s Finance Minister, has confirmed the nation’s improving economic conditions, optimistically stating that “the next period is better.” He anticipates that the government’s comprehensive, integrated, and coherent measures will effectively accelerate the resurgence of economic activity, particularly in agriculture, industry, and exports.
Despite the public treasury facing significant pressure from rising financing costs, interest rates, and goods and services prices, Maait underscored the government’s commitment to ongoing supportive initiatives for economic activities.
In an open dialogue regarding the new budget proposal with industry representatives, Maait highlighted its exceptional nature. The budget aims for an initial surplus of 3.5% of GDP, with general revenues expected to reach approximately EGP 2.5trn, mainly from non-tax sources. General expenses are projected at EGP 3.8trn, growing by 23%. The budget allows for considerable flexibility in spending to address both internal and external shocks and to continue reducing the cost of living for citizens, aligning with the government’s recent decisive actions.
The government has reiterated its dedication to maintaining stable tax policies to foster recovery and economic stability. Investors will not face increased tax burdens in the upcoming fiscal year, and adjustments to the Comprehensive Health Insurance Law will allow for the deduction of the solidarity contribution from the tax base.
The Finance Minister indicated that the new budget’s goals include increasing investments in health and education, curbing spending in other areas, and broadening social protection for citizens without adding to inflationary pressures. He clarified that public investment for all state entities will be capped at one trillion pounds for the fiscal year 2024/2025, providing more opportunities for private sector involvement in development and economic activities.
The upcoming fiscal year will introduce a debt ceiling for budgetary bodies and economic entities, which cannot be surpassed without approval from the President, the Cabinet, and Parliament. Furthermore, the initial surplus and half of the divestment program’s proceeds will be allocated to debt reduction and servicing, marking the start of the government’s debt reduction strategy. The aim is to decrease the debt-to-GDP ratio to under 80% within the next three years.
Ahmed Kouchouk, Deputy Minister of Finance for Fiscal Policies, emphasized the state’s reliance on the private sector to rejuvenate economic growth. The government has thus decided to cap public investments until the private sector can progress rapidly. Kouchouk expressed eagerness to bolster initiatives that incentivize industry and local production, linking support to tangible outcomes. In line with the general state budget, key documents such as the Financial Risk Report and the Tax Expenditure Report will be published to enhance transparency.
Kouchouk highlighted the government’s expansion of the comprehensive budget framework to include all state revenues and expenditures, revealing the true potential of the state’s public finances. This year marks the beginning of 40 economic entities, and within 5 years, it will encompass all state public entities, aiding in the enhancement of financial and economic performance metrics. He confirmed that the upcoming fiscal year is set to see a rise in profits distributed to the public treasury from all state-owned companies and entities.
Ehab Abu Eish, Deputy Minister of Finance for Treasury Affairs, underscored that special funds and accounts constitute approximately 10% of the total budget financing. These are subject to initial expenditure control by the Ministry of Finance representatives, followed by scrutiny from the Central Auditing Organization and Parliament, and financial audits by the Ministry of Finance. All financial disbursements maintain transparency to the relevant authority and the Ministry of Finance through the Government Financial Management Information System (GFMIS) and the Government Payment System (GPS).
He elaborated that among the 156 entities under the Comprehensive Health Insurance system, 47 are private sector entities, serving 4.4 million citizens, with current satisfaction rates surpassing 85%. This progressive system allows beneficiaries to select their service provider from either the private or public sector.
Representatives from the General Union of Industries, the Egyptian Businessmen’s Association, the Egyptian-African Businessmen’s Association, and the General Union of Chambers of Commerce conveyed their gratitude to the Minister of Finance for his dedication to engaging in societal discussions about the new budget proposal, considering their suggestions, and examining the principal budgetary projections and premises.
Ahmed El-Wakil, Chairperson of the Federation of Chambers of Commerce, lauded Maait for his adept management of public finance during extraordinary times, commending the recent initiatives that bolster the budget’s inclusivity and establish a cap on public investments. These measures afford the private sector an enhanced role in amplifying its contributions to economic and developmental endeavors. El-Wakil expressed, “We are eager to collaborate constructively with the government to address the challenges of the current period and surmount them.”
Mohamed Abdel Fattah El-Masry, Vice President of the Federation of Chambers of Commerce, stressed that the completion of the Wisdom Bond transaction affirms the state’s commitment to broadening prospects for the local and international private sectors, thereby augmenting state resources. He noted that foreign and Arab investors are drawn to countries that have addressed the concerns of local investors, a priority for the state as it fosters ongoing dialogue with the business sector and refines processes and systems pertinent to manufacturing and exporting in Egypt.
Mohamed El-Bahi, a board member of the Egyptian-African Businessmen’s Association, underscored the significance of continuous support for small exporters to boost the global market competitiveness of their products, yielding beneficial impacts on the structure of the Egyptian economy. The economy has undergone numerous decisive actions recently, significantly aiding in the creation of a more inviting investment climate.
Majed Al-Munzalawi, Chairperson of the Industry Committee at the Egyptian Businessmen’s Association, expressed gratitude to Maait for his dedication to fostering industrial localization in Egypt. He commended the effective strategies that paved the way for enhanced local production and export opportunities.
He remarked: “We are eager to back the Ministry of Finance’s efforts to sustain the industry’s low-cost financing initiative. We’ve observed numerous policy decisions recently that bolster the private sector’s role, notably the establishment of a public investment ceiling of one trillion pounds for the upcoming fiscal year.”
