CitizenBudget2018/2019

Arab Rebublic of Egypt

This booklet is the fifth edition of the Citizen Budget released by the Ministry of Finance. The booklet helps you to answer any question you may have and provides you with a brief explanation about the fiscal policy adopted by the state during FY 2018 / 2019, and the procedures that the state will take to improve the quality of citizen lives through various programs. The purpose of making this information available is to encourage you to exercise your right to participate in the decision making process. Your opinion is highly important and will be taken into consideration in policy design and monitoring government spending in order to meet your necessary needs and secure a brighter future for you and your kids.

Budget is a statement, identifying the revenues that the state is expected to receive over the fiscal year and the government plan to spend the revenue in various areas including health, education, housing supply with the aim to improve the quality of life for Egyptian citizens.

www.budget.gov.eg

What is the Citizen Budget?

What does Budget mean?

1

Budget deficit is the discrepancy between the state revenue and expenditures and net acquisition of financial assets during a given year. The government intends to reduce the deficit to prevent debt accumulation. The budget deficit for FY 2018 / 2019 is estimated at about 438.6 billion Egyptian pounds.

438.6Billion Pound

Overall Budget Deficit

989.2 Billion Pound

1424 Billion Pound

What does Deficit mean?

What are the main highlights of the State Budgetfor the FY 2018/2019?

Egypt gives priority to five main pillars for social protection in FY 2018 / 2019 budget as follows:

Gradually move from in-kind

subsidies to cash subsidies and

increase investment spending

to improve infrastructure

and enhance the quality of public

services.

05

Develop and improve basic

services received by citizens and

ensure equitable geographical distribution to

enable all citizens to benefit from the fruits of economic

growth.

04

Expand efficient social

protection programs targeting the most

vulnerable groups.

03

Maintain fiscal space to increase spending on human

development and protection

and justice programs.

02

Achieve higher growth and

employment rates to reduce

poverty and increase the

income of individuals.

01

Revenues

Expenditures

2

• Revenue for FY 2018 / 2019 is estimated at 989.2 billion Egyptian pounds, while expenditures are estimated at 1.424 billion Egyptian pounds.• FY 2018 / 21019 budget is one of the promising signals of economic reform which will generate an primary surplus in the state budget after we succeeded in achieving an primary surplus last year for the first time in 15 years; an evidence of the good management of state funds as our revenues began to cover our expenses, excluding the interests of public debt.• An amount of 67 billion Egyptian pounds of fiscal saving has been made, as a result of reducing electricity and petroleum subsidies to finance social protection programs in order to remove some burdens on citizens by:

Total expenditure for FY 2018 / 2019 is estimated at about 1424 billion pounds distributed as follows:

• FY 2018 / 2019 budget is witnessing an unprecedented increase in education and health allocations by about 177.4 billion pounds compared to only about 162 billion pounds in the budget of the last fiscal year, as the largest increase in allocations for the two sectors in the history of the Egyptian budgets.

Increase in the wage bill (about 5.2 million

beneficiaries) by

30Billion Pound

An annual increase of civil and military pensions (about 10

million beneficiaries) by

28Billion Pound

Increase tax exemption ceiling and rates of tax cut for low-

income earners by

9Billion Pound

How will your tax money be spent?

1424Billion Pound

Total expenditure

673.4 billion poundGeneral Public Services 1

Economic Affairs 61.2 billion pound

Health 61.8 billion pound

Public Order and Public Security61.7 billion pound

Youth, Culture and Religious Affairs

EnvironmentProtection

Social Security

Miscellaneous Expenditures

Education

35.3 billion pound

2.2 billion pound

299.9 billion pound

59.4 billion pound

115.7 billion pound

Housing and Public Utilities53.4 billion pound

1 The public services sector includes the total value of the benefits incurred by the state budget by about 541 billion pounds. By distributing the benefits to the budget sectors, spending on the education sector rises up to about 170 billion pounds, with a share of 10% of the total distributed benefits, and the expenditures on the health sector rises to about 90.2 billion pounds with a share of 5.2% of the total distributed benefits

3

The health sector has received the largest increase in its allocation to reach about 62 billion pounds in the new budget. The government investments in the health sector is planned to reach about LE 11.2 billion during FY 2018 / 2019.Provide an allocation of 5.7 billion pounds for the treatment program at the expense of the state, along with 1.5 billion pounds to cover health insurance for the financially unable people. In addition, 69 billion pounds has been allocated as contributions to pension funds with an increase of approximately 16.5 billion pounds from the previous fiscal year.Allocations for medicines and medical supplies increased to 7.0 billion pounds compared to 6.4 billion pounds during last fiscal year, while providing student health insurance, supporting female headed households, pre-school children and social security pensions.FY20182019/ budget also includes several measures to ensure that the new system for a comprehensive health insurance is implemented through the support of the Ministry of Finance and many stakeholders concerned with the new system and ensure the commitment of the public treasury to support the financial burdens of the new system until the system has the capacity to self-financing. However, the treasury covers the contributions of financially unable citizens.

Education allocations in FY 2018 / 2019 have unprecedentedly increased to reach 115.7 billion pounds. In 2018 / 2019, the government has planned to establish 549 new schools for primary and secondary education, as well as special needs education, along with the establishment of 100 technical education schools inside some factories and renewing 165 schools for technical education.The government seeks to ensure access to school meals for all students in the primary education amounting to 15.4 million students. The government is also working to strengthen the teachers› skills and capacities by training 1700 teachers in cooperation with the British Cultural Center. As for the secondary education, the government seeks to increase the number of STEM students to 7200 students. The government is also working to develop the technological infrastructure by providing a mobile classroom equipped with laptops and smart projectors in 1936 schools.In 2018 / 2019, the government will also renew 120 curricula for secondary education and 170 curricula for technical education using competencies mechanisms.

Health

Education

4

Who Benefits most from FY 2018/2019 Budget?

The government seeks to achieve fair geographical distribution of investments to ensure all citizens benefit from the fruits of the economic reform program. The investment for FY 2018 / 2019 is to be distributed as follows:

Ismailia

%3

Fayoum

%2

Qaliubia

%4

Menufia

%4Gharbia

%3

5

Red Sea

%3

New Valley

%3

Matrouh

%3

Aswan

%4

North Sinai

%2

South Sinai

%2Giza

%11

Qena

%3

Alexandria

%5

Luxor

%2Sohag

%3Assiut

%4Minia

%3

Beni-Suef

%3

Suez

%2

Behera

%3

Damietta

%2

Kafr Elsheikh

%2

Daqahlia

%3

Port Said

%2

Sharqia

%4

Cairo

%13

What are the key government reforms that will be made during the coming years to ensure

efficient and fair Public Financial Management?

5 5

On the Expenditure Side:• Increase spending on social protection, in particular the programs targeting most vulnerable groups.• Improve spending allocation to enhance economic activity to create new jobs, particularly for youth, and increase citizens› income and reduce poverty.• Develop a system for monitoring, evaluating and managing financial risks to monitor any potential risks in a timely manner.• Reprioritize public spending on productive and investments sectors, while rationalization unguided in-kind subsidies.• Continue to reform the energy sector, including the elimination of price distortion.• Embark on reforms to enhance the efficiency of public financial management that includes the automation of all government transactions in addition to revenues and expenditures. • Expand public-private partnership programs.

On the Revenue Side:• Maximize tax and non-tax revenues, while diversify non-sovereign revenues.• Expand the tax base and ensure justice in distribution of tax burdens among various income segments and include the informal sector.• Ensure a proper pricing of goods and services provided by the State.• Focus on administrative and institutional tax reforms to enhance the efficiency of tax management and tax collections and to avoid tax evasion and tax avoidance.• Move forward with the IPO program for some State-owned companies, generating additional revenues to help finance the requirements of public spending, human development and social protection.•Enhance the efficiency of public financial management including automation of all government transactions along with revenues and expenditures.

6

This document has been prepared by the assistance of the UNICEF Social Policy Unit. It should be noted that all information in this document is generated under the supervision of Ministry of Finance only as it is the main source of all FY 2018 / 2019 budget data and allocations.

For more information, please follow us on our official page

OR via the budget transparency website

http://budget.gov.eg

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Arab Rebublic of Egypt