Egypt government continues to violate constitutional provisions on public spending

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The Egyptian constitution obligates the government to allocate a percentage of government spending to health that is not less than three per cent of the gross national product, and to allocate a percentage of the state’s general budget for education and scientific research that is not less than seven per cent of the gross national product.

For years, the regime of President Abdel Fattah Al-Sisi refused to apply these constitutional rates and added other items from the state’s general budget to the health and education allocations, so that they were inflated on record in order to reach the due constitutional ratios.

What is new these days is the fact that the Egyptian parliament passed the “unified finance law” that gives legal legitimacy to the government’s controversial view on some spending items on health, education, and scientific research, which is not surprising from a parliament that was made under the censorship of the Egyptian security services to serve the interests of the system.

Three tricks to raise spending on health

There are three measures that the government takes to appear in conformity with the constitution. The first is to announce allocations that include some items that do not actually appear in the budget under the name of education and health but are found in the budgets of other sectors according to the general budget law.

For example, the budget of Al-Azhar Al-Sharif falls within the cultural and religious affairs sector according to the law, but Al-Azhar can be considered an institution that provides an educational service, so its allocations can be combined with the allocations for the education sector, and therefore the government includes them fictitiously when talking about education allocations, but they are not actually included in this clause.

An example of expenditures that are included in spending on health to be inflated are expenditures directed to army hospitals, although they are by law among the total expenditures of the armed forces, which are presented to parliament as a single item and are not discussed in detail. On the other hand, the services provided by these hospitals are not freely available to the public other than the families of employees of the armed forces, and therefore it is difficult to consider this as public expenditure on health. The second of these measures is for the system to use the GDP, (general domestic product) of the previous year to attribute spending to it, instead of the GDP of the fiscal year for the general budget in question.

The most prominent and cunning of these measures is the formal distribution of government debt benefits to the various budget items, in proportions that correspond to the share of each item of expenditure. If education represents 10 per cent of the general budget, then “nominally” an estimated 10 per cent of the debt bill is added to the education sector allocations. This increase represents a nominal addition equivalent to about one third of the constitutionally required amount in the education and health sectors.

However, in the budget document, these benefits remain in the section on benefits completely away from education and health allocations, and they cannot be used for spending on them. Rather, they are sums that could have been allocated to education and health if they had not gone to the payment of interest on debts.

The budget exposes deceptions

The 2021/2022 budget exposes these practices and games. Despite the government’s affirmation of its commitment to the constitutional limit on spending on health and education, the actual spending on health amounts to EGP 108.7 billion in the budget, which does not exceed 1.5 per cent of GDP, or half of the percentage set by the constitution, which represents three per cent of the production as a minimum, despite the repercussions of the coronavirus on the medical sector in Egypt and all over the world. Also, the percentage of spending on basic and university education did not reach half the stipulated amount in the constitution as a minimum, as it amounted to about 2.42 per cent of the GDP, while the percentage stipulated in the constitution is six per cent as a minimum.

The financial statement for the 2021/2022 budget witnessed a great discrepancy between the numbers included in the budget tables, and those mentioned in the statement’s preamble regarding education and health expenditures. While the health and education sectors in the expenditure table, in the functional division of the budget, got 108.9 billion pounds and 172.6 billion pounds, respectively, the preamble to the financial statement stated that 275.6 billion pounds and 388 billion pounds were allocated to each of them, and the statement was considered based on those figures that contradict what was stated.

In the budget tables, the specified constitutional spending ratio for education and health has been achieved. But as we explained earlier, it’s just a digital trick the system plays, and it didn’t even manage to hide it very well. The irony is that after all these deceptions and manipulations, the system comes to complain that the financial allocations directed to health are not sufficient to improve the service, and that there are insufficient financial resources to bridge the teachers’ deficit of 300,000 teachers, while the solution is easy and simple, which is to implement the constitutional texts seriously without circumvention. Instead of parliament, which is supposed to be the voice of the people, to stop the system on its own and stop this unconstitutional farce, it rewarded the government and gave legal legitimacy to its deceptions to inflate spending on health, education and scientific research.