By Mohamed Ayyad
Minister of Finance Hany Kadry Dimian has approved the provision of more than EGP 922m to support a number of sectors of production in this year’s general budget, according to a Friday statement by the Ministry of Finance.
The statement said that the additional allocations, distributed to enhance the fund for restructuring the public business sector will come in two instalments. They will be allocated to finance wage deficits in textile companies and will bring total funds allocated to the textile sector to EGP 1.17bn for the current fiscal year. This is aside from the EGP 30m for the Egypt Iron and Steel Company.
Musbah Qutb, adviser to the finance minister, said the minister is presenting two scenarios for the 2014-2015 budget to the cabinet. The first includes reforming subsidies aimed at reducing energy subsidies and increasing fuel prices, and would allow a gradual reduction of the budget deficit to 10.5% versus 14.5%. The second scenario of the budget has no such reforms.
The government has not presented the 2014-2015 draft budget to the president, the current representative of the legislative authority, in violation of the 2014 constitution, which stipulates that the government must submit the budget in April of each year.
“We are going through an exceptional stage with the absence of the parliament and constant changes in the government,” Qutb said. Based on the latest presentation of the new budget, the government has two scenarios, but is afraid of the strongly preferred scenario involving the removal of subsidies, fearing the wrath of the street, according to the ministerial adviser.
This year the budget deficit will reach 11.5% of GDP. It benefits from Gulf assistance exceeding $12bn, Qutb added.
Additional allocations include EGP 3.15m for Al-Azhar University for the maintenance of areas damaged during clashes at some of its colleges, along with EGP 220m for the Egyptian Radio and Television Union, which comes along with the regular monthly payments made by the treasury to support the union.
The provisions also include EGP 493.3m to strengthen funds for the Ministry of Higher Education and Scientific Research, EGP 115.3m of which is to fund minimum wages for public universities and the rest directed to finance other deficits in university budgets.
The minister also approved allocations for the State Council worth EGP 36m to be used in the restoration of the council’s courts in eight provinces – Beheira, Minya, Beni Suef, Sohag, Ismailia, Gharbeya, Kafr Al-Sheikh and Fayoum – as well as to equip and furnish the Princess Fawzia Palace, which is under the supervision of the State Council.
