Wages account for 55% of health financial allocations in next budget

Mostafa Fahmy
4 Min Read

The wages and compensation of employees in the Ministry of Health account for 55% of the financial allocations to the health sector in the next fiscal year’s budget.

The health sector’s budget showed that the ministry allocated EGP 30bn to wages out of total EGP 55bn.

The wage allocations are declining by 3% in the next fiscal year compared to the wage allocation in this year.

The investment allocations in the new budget rose to EGP 10.3bn, compared to EGP 7.6bn in the current fiscal year, representing 18.7% of the total health allocations, compared to 15.5% in the current fiscal year—an increase of 3%.

The investment allocations are relatively low in regards to the number of hospitals that the Ministry of Health aims to develop within the comprehensive health insurance system.

A government source told Daily News Egypt that the relative decline in wage allocations would reflect positively on investment allocations.

He expected that investment allocations will keep increasing over the next ten years, amid the government’s plan to implement the comprehensive health insurance law.

The budget also showed an increase in the allocations of the purchase of medicine and medical supplies, amounting to EGP 10bn compared to EGP 8.7bn in the current fiscal year.

The source pointed out that the allocations of medicines were increased by EGP 1.3bn to meet the large increase in the prices of medicines and medical supplies, especially after the Central Bank of Egypt’s (CBE) decision to float the pound.

The Ministry of Health allocated EGP 6.5bn of its total allocations for medicines only, compared to EGP 4.3bn in the current fiscal year.

The increase in the financial allocations for medicines follows the new increase approved by the ministry on government medicine tenders a few days ago, according to previous statements by a government source.

According to the financial statement of the budget, the medicine allocations reached EGP 2.9bn in 2013-2014, EGP 3.5bn in 2014-2015, and EGP 3.6bn in 2015-2016, and are expected to record EGP 4.3bn in the current fiscal year.

The budget also showed that the financial allocation for subsidies, including medicines and infant formula, reached EGP 4.1bn, while the debt benefits settled at EGP 40m, and EGP 1bn for other expenses.

The source explained that the budget allocations of the Ministry of Health do not represent the total public expenditure on the health sector. It only includes the funds granted to the ministry to spend on the sector.

He added that the government is committed to increase the health allocations to 3% of the GDP in accordance with the Constitution.

The total expenditure on the health sector in the next year’s budget is estimated at EGP 103bn, equivalent to 3% of this year’s GDP, amounting to EGP 3.4tn, and represents 2.5% of the next year’s GDP, estimated at EGP 4.1bn. The Ministry of Health controls only 50% of the expenditures on the health sector, while other government bodies control the remaining percentage.

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