Egypt’s government budget 2022/2023: The public debt devours the budget


Egypt’s house of representatives passed the government budget for 2022/2023 with a total of EGP 3.066 trillion (USD 166 billion). The budget is divided into seven chapters. The first is related to governmental employees’ wages and compensations, which took EGP 400 billion, while the second, the commodities and services, took EGP 125.600 billion.

The third and eighth chapters are related to the public debt and acquired the lion’s share with EGP 1.655 trillion, including EGP 965.488 billion for the instalments and EGP 690.488 billion for the interests. The governmental investment took the sixth chapter, worth EGP 367.428 billion.

In comparison to 2021/2022, the total value of the budget increased by about 20%, mainly due to the instalments of the public debts. The total expenditure, excluding the instalments, increased by 11%, from EGP 1.837 trillion to EGP 2.070 trillion. On the other hand, the total revenues increased only by 10%, from EGP 1.365 trillion to EGP 1.517 trillion. In-depth, the increase in revenues is attributed mainly to tax yields, which rose from EGP 983 billion to EGP 1.168 trillion, while the non-taxes revenues declined from EGP 380 billion down to EGP 348 billion. Accordingly, the budget deficit increased from EGP 472 billion in 2021/2022 to EGP 553 billion in 2022/2023, recording 6.1% of the GDP.

Regarding sectors, the public services came first with EGP 1.021 trillion. At the same time, health and education acquired EGP 128 billion and EGP 192 billion, respectively, taking much lesser than their constitutional shares, which amount to 3% (about EGP 300 billion) for health and 4% (about EGP 400 billion) for the education of the total GDP. Although the pro-state parliamentary majority supported the budget, several MPs sacked the government, considering the significant budget proof of the governmental failure.

MP Diaa Eddin Dawoud refused “the poverty of the budget” that he considered a “resumption of the government’s poor policies that failed to treat the structural problems.” Dawoud focused on the rise of the debt share of the budget, considering its upgrade from EGP 167 billion in 2010/2011, representing 33% of the total budget, up to “EGP 1.655 trillion seizing 49.7% of the budget.” (According to the final statement, the debt service represents 53.9% of the budget). Dawoud also criticized the high compensations allocated for the members of some independent bodies such as the Elections National Authority in what the government called “a budget of austerity.”

MP Moustafa Bakry, though known for his ties with the ministry of defence, expressed his refusal of the budget, stating, “the budget neglected the sectors of real production, industry and agriculture.” Bakry avoided criticizing Abdel Fattah al-Sisi, holding full responsibility for what he called “the degeneration of the middle class” in the government. MP Ahmed al-Sharkawy said the government should declare the failure of the economic reform plan as the taxes remained above 70% of the state revenues. Sharkawy hinted at the enormous allocations for the Sisi-sponsored Monorail project, which acquired EGP 50 billion of the governmental investment. In contrast, education and health got 34 and 45 billion, respectively, and the state refused to fund the ministry of education with EGP 19 billion necessary to employ new teachers to fill the deficit in the number of teachers. Sharkawy also pointed to the problem of doctors’ efflux because of the small salaries.

The relationship between the economic bodies and the public budget was controversial. The financial bodies are the state-owned enterprises such as the ports, the New Urban Communities Authority and the Suez Canal Authority. The number of them is 59. Despite being state-owned, those enterprises have independent budgets that do not appear in the public funding but are related to the public debt due to the public financials united law (law 6 of 2022). According to the law, the revenues of those enterprises appear in the public budget as state revenues. The general budget also includes the fund provided by the state treasury to them.

According to the statistical statement of the public budget issued by the treasury, the balance between revenues acquired and the fund provided by the general budget is negative, as the public budget always carries losses that amounted in 2022/2023 up to EGP 169.7 billion. The statistical statement also showed the governmental plan to fund the economic bodies mainly by loaning. Those bodies loan as independent enterprises, but the treasury carries the burden as those enterprises are state-owned. This year, the budget showed the governmental plan to provide EGP 251 billion loans to those bodies, representing 61% of the total governmental fund.

MP Mohamed Ezzat Arafat attacked the economic bodies, “they are manors inside the state,” pointing out that their independent budgets make them out of the parliamentary oversight despite the governmental fund they got. “I refuse this public budget totally and in detail, formally and objectively.” MP Mohamed Badrawy, a member of the planning and budget committee in the parliament, said the government has no vision to stop loaning or even reduce it.