The Ministry of Finance has pledged it will use treasury bonds to repay the general budget’s debt owed to the National Organization for Social Insurance (NOSI), amounting to EGP 162bn between 2011 and 2013.
The agreement came following a Thursday meeting between Minister of Finance Hany Qadry Dimian and Minister of Social Solidarity Ghada Waly.
Pensioners, who fall under the authority of NOSI, have said the government owes them around EGP 600bn, as the National Investment Bank, a state bank managing public investment, had lent this money to governmental agencies “and has not provided pensioners with the interest owed to them”, the Pensioners Solidarity Syndicate stated.
However, in December, the finance ministry denied the money allocated for pensions and insurance had been used to finance state institutions in this way. The ministry added that insurance debt from 1980 to 2006 never exceeded EGP 69bn.
Dimian noted that the repayment period would conclude by 2021, which he called an “appropriate” period of time in order to prevent financial disturbances or increasing the budget deficit.
“The first two treasury bonds, with the value of EGP 28.4bn, have already been issued,” Dimian added.
The minister stressed the significance of maintaining a balance between the bonuses of pensions and social insurance, and financial situation of the country, emphasising the need “not to increase the public debt”.
Meanwhile, Waly announced that her ministry and the NOSI are currently preparing a new social insurance draft law that would be concluded within three months and “issued for communal dialogue before submission to the parliament”.
The pairs also discussed setting a minimum pensions’ value, with Waly saying her ministry is studying the possibility of applying such a value gradually.
In order to finance the increases in pensions, the NOSI will study the alternatives and submit a proposal to the finance ministry, the statement said.
In October, the interim government decided to increase the pensions of government workers by 15%, effective since January 2014.
Public expenditure on wages and compensations comprised EGP 141bn of the state’s budget in the fiscal year 2012/2013, representing a 14.8% increase year on year.