Egypt’s IBP index rank risks fall due to budget delay: Economists

Abdel Razek Al-Shuwekhi
5 Min Read

The Ministry of Finance is yet to announce the draft budget, despite the constitution dictating that it must be announced 90 days before the start of the new fiscal year, said Mohamed Mansour, the programmes manager of the International Budget Partnership (IBP).

He added that this lateness will lower Egypt’s rank in the IBP index.

The Ministry of Finance is yet to announce the draft budget for the next fiscal year (FY) 2015/2016 even though the new fiscal year is approaching, said Mansour. The budget deficit for this FY 2014/2015 is the main reason for the delay in the announcement.

The IBP index starts from 0 to 100, and when a country gets a higher rank, it indicates transparency in the documents related to fixing the budget.

The years where Egypt’s rank was high in the IBP index were between 2008 and 2010. In 2008, Egypt’s rank was 43% in terms of data transparency for the budget.

In 2010, Egypt’s rank was 49%, while Jordan ranked high than Egypt. Lebanon, on the other hand, came after Egypt and Morocco. Meanwhile, Yemen and Saudi Arabia came in the last places, according to IBP.

In the current FY 2014/2015, the government plans for the budget deficit to reach 10%.

However, according to an official at the Ministry of Finance, the budget deficit by the end of FY 2014/2015 will increase to 10.5%

The Ministry of Finance has previously stated that it aims for the budget deficit to be at 8% in the next three years.

The government plans to decrease the allocations for subsidising oil products for the second FY in a row, as per its strategy to cancel subsidies on fuel within five years. By the start of the current FY 2014/2015, the government adopted a policy to lower allocations for the subsidy on energy, and they went down to EGP 100bn.

Egypt’s index retreated severely during 2012 at the time of the administration of the Supreme Council of the Armed Forces, due to the lack of government commitment to the standards of transparency in the budget process.

Egypt got 13 out of 100 points during 2012, against its 49 points in 2010.

Open Budget Surveys are prepared every two years since 20016. It is the only universal periodic survey implemented in several countries of the world by independent researchers of civil society in these countries, in collaboration with the International Budget Partnership (IBP), to assess whether the central governments in the countries surveyed allow the public access to private information regarding the public budget.

The IBP is expected to issue a report surveying the budgets during 2015, according to the economic researcher at the Egyptian Centre for Economic and Social Rights (ECESR), Amira Khalil. She added that announcing the draft budget at an appropriate time to engage the community in the discussion is crucial.

According to Khalil, the Egyptian constitution obliges the government to present the draft budget to parliament 90 days before the end of the ongoing fiscal year. She added that now, Egypt has no parliament, which requires it to be presented to the representative of the legislative authority, currently the president of the republic.

The ECESR researcher believes that the absence of parliament requires more transparency from the government, not the other way around. The government should not argue that there is no legislative authority to review the draft budget at an appropriate time to engage the community in the discussion.

Statements by the Ministry of Finance; from pre-budget statement, monthly report, balance accounts and citizen budget, account for 40% of the points of the budget index survey conducted by IBP, according to Khalil.

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