Canada Egypt Business Council (CEBC) & the Egyptian Business Council for International Cooperation (ECIC) were honored to host this seminar which was held on Tuesday, September 03^rd, 2019 & attended by the distinguished guests whom were highly interested in discussing the challenges & ambitions in implementing the best economic reform program among the emerging markets in the world.

The current budget aims to establish the pillars of social protection, and that citizens feel the fruits of economic reform implemented by the government, pointing out that increasing and diversifying revenues to meet the significant developments in spending items remains the most important challenges…

In this context Canada Egypt Business Council and the Egyptian Business Council for international cooperation organized an event with H.E. Dr. Mohamed Maait; Minister of Finance discussing the topic “The Largest Budget in the History of Egypt… Challenges & Ambitions”

   In the opening remarks, Eng. Motaz Raslan welcomed all members and guests, mentioning that the Egyptian economy faced many challenges before the economic reform program, which was the electricity crisis, the decline in cash reserves and the shortage of hard currency. And then he said that the Egyptian economy has overcome all the problems that had an impact on the Egyptian economy, but Egypt succeeded in crossing that stage.

   He also pointed out that the implementation of the economic reform program was accompanied by some difficult decisions taken by the government to reform subsidies and budget and the rest of the tax, financial and monetary reforms.

He added; that these challenges were considered as time bombs that could hit the Egyptian economy, so it was necessary to program economic reform, which achieved many successes with the praise of the International Monetary Fund, and a number of international institutions including the Financial Times, which saw it as the best story of economic reform in the middle east.

   H.E. Dr. Mohamed Maait denounced; ‘I like to reassure Egyptians about the Suez Canal’s certificate funds, which are now already in banks and they can spend them and invest them in buying a property or putting them in investment certificates’.

   He added that during the past months, the Ministry of Finance has sent the Bank of Moxie to the bank with Suez Canal certificate funds and the citizens can start disbursing it.

   He pointed out that the strength of the Egyptian economy and the economic reforms that have occurred made him able to hold steady in the face of investors’ flight from emerging markets, although many countries changed their monetary policy to face the displacement of those investments such as Argentina, which raised the interest rate by about 10% and Turkey 6.2% but Egypt refused to change its monetary policy because of the strength of its economy.

   He pointed out that Egypt succeeded in the light of the economic reforms implemented in achieving real growth rates reached the last fiscal year about 5.5% after achieving negative growth rates before the implementation of the program, pointing out that the growth rates after the economic reform program are real growth rates.

   He said high growth rates have led to low unemployment rates, and the overall budget deficit has fallen to 8.2% of GDP from 17% in the 2013-2014 fiscal year budget.

   Egypt went through the current period in the aftermath of January 25, but it has now been able to achieve important results, through the figures, the development of the macro-economy, especially the indicators of economic growth, the growth rate was between 6-7% before the revolution, and then we started to achieve results negatively 4-4.5, and now we achieved a rate of 5.6% and we target the rate of 6%, noting that the fruits of development are spreading to all geographical areas in Egypt,  pointing out that some expect poverty rates to rise to more than the current figures, but the Egyptian government is dealing with this indicator through many initiatives and social welfare programs.

   Dr. Maait spoke about the equation of dealing with the deficit by reducing spending, while the state seeks to increase investment with the need for investment spending. “We were borrowing to pay the salaries and spend on a small part of the investments, and now the borrowing has become especially the last four years with the aim of investing, where these rates have increased and at the same time the deficit has been reduced,” he added: “Maait”: This year we target a deficit rate of less than 7.2%, and then reach the rates allowed by the EU and countries maintain balanced deficit rates, noting that the state is investing 160 billion for pension funds and 170 billion pounds next year.

   He pointed out that the ministry will discuss new mechanisms to increase the state’s resources by attracting the informal sector, pointing out that external debt represents more than 30% of GDP, which requires work to decline under this ratio in accordance with international standards.

   The minister, in response to the accusation of Ali Issa, chairman of the Businessmen Association, told the government to abandon export subsidies, that the ministry allocated about 4 billion pounds in favor of export subsidies in the fiscal year 2018-2019, stressing the commitment of the state in this context.

“If the government is not committed, why did it pay this amount?” he said.

   The minister added that in light of economic conditions and the need for spending on health and education, the government has increased subsidies directed to exports by 50% to reach 6 billion pounds this year, which did not happen in spending on health and education.

   And finally his Excellency also added that within the framework of the government’s keenness to ease the burdens on the citizens, the subsidy of the supply of goods during the past five years has increased from LE 39.4 billion in the 2014/15 budget to LE 89 billion in the current budget. The contribution of pension funds increased from LE 33.2 billion to LE 82.2 billion.

   It is worth mentioning that the value of citizens’ subscription in the new certificates of Suez Canal, which amounts to 64 billion pounds, is ready with the Central Bank, and that these citizens have the freedom to dispose of their dues.

The floor was then opened for questions and answers session, where several questions and suggestions were discussed considering the Egyptian budget.