New Budget Allocates EGP 285 Bln To Social Expenditure Programs

Momtaz El Saeed, Minister of Finance, affirmed on the government’s concern to ease the burden on low-income people through working on providing the basic goods and enhancing the social expenditure provisions. This is clearly reflected in the draft general budget for the new fiscal year 2012/2013 which will start in July.

The Ministry of Finance has allocated more than EGP 284.698 billion for social expenditure programs with an increase of EGP 15.8 billon, higher than that of the general budget of the current fiscal year. These provisions account for 70% of the general fund net expenditure budget, after excluding interest on the public debt.

The 2012/2013 budget allocated EGP 64.484 billion to education, up from EGP 51.264 billion, with an increase of EGP 13.200 billion, or 25.7%. The educational provisions account for 12% of the public expenditures and 3.6% of the gross domestic product, affirming the government’s belief in the importance of education in Egypt’s future.

Allocated provisions for pension and social security were increased by EGP 10 billion, reaching EGP 50.451 billion; of which EGP 20.700 billion was allocated for social pension funds.

El Saeed said the provisions for interest on pension funds were also increased by EGP 1.5 billion, registering EGP 17.600 billion which are used in government investments.

Health provisions were also increased in the new general budget by EGP 2.5 billion, registering EGP 28.611 billion. New health care programs were introduced in the new budget such as allocating EGP 120 million to subsidized health care program for women breadwinners and EGP 156 million to health care programs for children under school age.

El Saeed affirmed that the general budget includes direct and indirect subsidy programs with costs of EGP 112.986 billion to ease the burden on citizens.

Decreasing the subsidy provisions for the next fiscal year is line with the state’s plan for rationing subsidies on petroleum products. However, provisions for other programs were notably increased. Provisions for commodities were increased to EGP 26.6 billion; of which EGP 16 billion was allocated for purchasing local and imported wheat and maize used in baking subsidized bread with an increase of EGP 5.3 billion, 50%, higher than that of the budget of the fiscal year. Provisions of oil were increased by EGP 435 million, provisions of sugar were increased by EGP 490 million and provisions of rice were increased by EGP 184 million. Provisions allocated for supporting farmers were increased by EGP 240 million, registering EGP 537 million to provide them with agricultural production requirements including fertilizers, seeds and pesticides. In addition, soft loans will be offered to young farmers. In addition, EGP 200 million was allocated for developing South Egypt region which were cancelled in the budget of FY 2011/2012. Provisions offered for industrial areas were increased by EGP 200 million, registering EGP 300 million. Provisions of training programs for workers were increased by EGP 250 million, registering EGP 300 million.

Subscriptions of means of transportation were subsidized for students by allocating EGP 400 million. Transportation subsidies were also increased by EGP 373 million, registering EGP 1.224 billion. EGP 205 million was allocated to increase mortgage fund.

El Saeed added that EGP 700 million was allocated in the new budget to finalize the housing units of the national housing project for low-income people.