The World Bank revealed low spending on social protection in Egypt, which leads to weak investment in human capital and dissatisfaction with the level of public services. The report, Egypt Public Expenditure, published last Tuesday, also pointed out that the allocations for social protection programs in the budget for the fiscal year 2020 decreased to 0.3% of GDP in real terms, which is a third of what the government spent on the same programs in 2013, before President Abdel Fattah El-Sisi took office.
The World Bank data demolishes many government narratives carefully promoted in the state-owned media, with the government repeatedly asserting that it’s spending on social sectors is increasing and meets the constitutional ratios. It also confirms that the poor are receiving the necessary support and that government services are constantly improving, which this report denies. Coincidentally, four ministers participated in its launch event. The World Bank report indicated that Egypt had undertaken an “important reform” by easing fuel subsidies, which resulted in many savings in state resources. Still, it did not translate into real increases in spending on major social assistance programs, which stabilized at 2.1% of GDP in 2020, equivalent to 0.3% of GDP in real terms. Compared to international levels, government spending on social protection in Egypt is less than half the global average at 0.9% of GDP and lower than the average spending in the Middle East and North Africa region of 0.42%.
The report said that the decline in government spending had a severe impact on the level of services and social outcomes and gave an example in the education sector, where the shortage in the number of teachers (320,000 teachers) and classrooms undermined the quality of the learning environment in pre-university education stages. In contrast, insufficient financial resources have been allocated to increase enrollment rates in higher education, enhance the continuity of public universities and support research activities. The report referred to the health sector, whose weak government spending – or its decline – led to an increase in the financial burdens borne by families. The inability to afford this cost is a barrier to accessing health services, as patients spend more than 60% of their own money on health spending, which is among the highest rates in the world. The inability to afford these costs has caused many of the poor not to seek treatment. Government facilities are also suffering from a decline in the standard of care due to shortages of medical staff, mismanagement of drug supply chains, and depletion of their stocks. Although the report praised many of the financial and administrative reforms taken by the government, it indicated that poverty rates are still rising constantly and that there is a disparity in income levels between geographical regions. It also pointed out that the “Solidarity and dignity” programs, which are dedicated to supporting the poorest classes, cover only 50% of Egypt’s poor, estimated at more than 30 million citizens. The reason for this is poor spending.
The World Bank called on the Egyptian government to increase government spending to become equal to other countries with similar economic capabilities to achieve its development goals and, at the core, including human capital. It also urged it to link the budget planning to clear criteria and the purposes of providing services, besides taking additional measures to support the raising of efficiency. Government spending aims to achieve justice in obtaining good-level services, so that poor and priority care categories and disadvantaged areas get adequate support.