Why has Egyptians' interest in the government budget declined?

The government budget in any country represents the financial program for government spending during the next year, and as the government is the largest investor and buyer in developing countries, interest in the budget intensifies, as the value of government investments in the fields of infrastructure, housing, health and educational facilities represents new contract opportunities for construction companies, whether large or small.

The value of government procurement in the budget year such as medical supplies, food, tools, spare parts, stationery and maintenance operations also represents opportunities for merchants to stimulate their sales.

The size of the benefit can be imagined with the value of investments in the new Egyptian budget reaching EGP 587 billion and the value of purchasing goods and services EGP 139 billion.

With the contracting work and the activity of traders, the workers benefit from their continued work and improve their standard of living, as well as the producers of building materials, workshops, manufacturers and importers of all goods and services purchased by the government, or as they say the back parties.

In light of the intervention of the sovereign authorities by acquiring the largest share of government investments, the role of major contractors has turned into subcontractors, where the sovereign entity undertakes the implementation of the project and redistributes their components to them after obtaining the largest share of the profit, and this is repeated with the government's purchase of the requirements for managing the government work wheel in ministries and authorities by assuming the task of the largest share of purchase, whether from home or abroad.

There is no difference here between medical supplies and medicines for government hospitals, which are now purchased by a government agency, or even printing textbooks, which take the largest share of army presses, police presses and government newspapers at the expense of the share of private sector presses, and even school feeding, which used to represent an area of private sector sales in the governorates, the largest share of which is done through one of the army companies established specifically for this purpose.

As for the simple Egyptian citizen, his interest in the government budget is mainly focused on budget support allocations, which go to free goods that he receives monthly through the ration card system that has been ongoing since the end of World War II until now.

This system is the one that has been amended since 2014 to become a specific amount of cash per individual who buys food commodities in response to the instructions of the International Monetary Fund, after the system has been for many years represented in the disbursement of commodity decisions a specific amount per person per month, which is two kilograms of sugar, the same of rice and a kilo and a half of oil for 10 pounds, while the current system set a financial value per person, which has been increasing from 15 pounds until it reached 50 since mid-2017. Up to 4 family members, and the prices of prescribed goods are increased periodically, which practically leads to a decrease in the quantities obtained.

This is how citizens hear about the value of subsidies in the new budget reaching 530 billion pounds, while the allocation for ration cards amounted to only 36 billion pounds, which is less than 7% of the value of the subsidy, which is praised by the massiveness of the media.

Most of the value of the support goes to many areas unrelated to the poor, such as support for exporters, owners of industrial, agricultural and tourism companies, the railway authority, the public transport facility, drinking water and military production companies, police clubs, clubs affiliated with the Ministry of Finance and the Nile Basin Initiative to provide assistance to the Nile Basin countries.

EGP 135 billion was also included in the subsidy as contributions to the public treasury in the Social Insurance Authority, while this value represents part of the annual premium of EGP 202 billion for the private debt of the Insurance Authority on the public treasury for seizing insurance funds years ago, as the natural place for that value is the section on government debt installments, but the fiscal policy maker puts it within the support to inflate the figure.

The media talks about the growth of the value of the subsidy in the new budget compared to the previous budget, so the citizen finds that the list of goods available to him to buy from them with the value of the supply subsidy of 50 pounds per person has increased their prices all under the pretext of increasing international prices, while the prices of imported and local products in the list have increased even locally produced salt, which reduced the quantities that can be obtained, which were partially relieved, as the quantities scheduled for monthly consumption are not enough, especially with a maximum limit for the purchase of The basic commodities are oil, sugar and rice, which means that the poor buy some of what they consume at market prices.

Another segment of society interested in the budget is the category of workers in the government, which number about 4.5 million people, where the new budget is usually associated with the approval of a premium that increases their monthly wages, but high inflation rates have become more than the rate of increase in wages, which makes the real value of wages decrease despite their nominal increase, and the general public does not care about the total number of wages in the new budget of 470 billion pounds, because the allocation for basic wages is 102 billion, and the rest are bonuses, allowances and benefits, most of which adults get.

Because the budget usually consists of two aspects, spending and resources, where the government spends within the framework of the resources it obtains, the insufficient resources for the planned expenditures push the government to impose more taxes and fees, which increases the burden on citizens and businessmen.

It also pushes the government to borrow more, and as the budget deficit continues, the government continues to borrow by offering government debt instruments that banks accept to buy as a way to invest part of their money.

But this comes at the expense of banks lending to productive and service companies, as banks prefer to lend to the government to the guaranteed customer not to go bankrupt, while the possibility of companies defaulting in the event of lending increases due to the recession that has dominated the markets for years, which led to a decline in sales of many companies.

Most importantly, the government's continued borrowing to fill the annual budget deficit has led to the allocation of specific amounts annually in the budget for the expenses of installments and interest on this debt, and with the continuation of borrowing, the allocations for government debt installments and interest increased until it had the largest share of spending in the budget.

Here is the budget for the next fiscal year 2024/2023, whose financial statement was submitted by the Minister of Finance to Parliament, indicating that the allocations for installments and interest on government debt amounted to two trillion and 436 billion pounds out of a total expenditure of 4 trillion and 349 billion pounds, meaning that it accounted for 56% of the total spending, distributed between 30.3% for installments and 25.8% for interest.

This percentage does not benefit any of the citizens, leaving 44% of the spending distributed to the rest of the six sections of the budget, 13.5% for government investments in roads, sewage, drinking water, schools and hospitals, 12.2% for subsidies that have been inflated, 10.8% for the wages of government workers, 3.3% for the expenses of the army, parliament, the Senate and participation in international organizations under the heading of other expenses, 3.2% for the purchase of goods and services for government agencies, and 1% for government contributions to troubled bodies and holding companies.

It is clear that the rest of the allocations are insufficient to spend on annual needs, especially with regard to the purchase of goods and services, which prompts government hospitals to ask patients' families to purchase some medical supplies at their own expense, and many government agencies also pay to ask those who frequent them to photocopy documents at their expense outside government agencies due to the lack of paper necessary for photography.

The lack of allocations for investment projects also causes a prolongation of their implementation periods, instead of the project being implemented within a certain period of time, the period is prolonged due to the decrease in the value of annual allocations, which confuses the project's implementation accounts in light of the high prices of building materials, and on the other hand, disrupts improving the standard of living of citizens waiting for these projects for years.

The government also always gives priority to debt installments and interest so that it can continue to borrow from lenders internally and externally, especially since the increase in the allocations of those installments and interest is more than previously planned, in the budget of the current fiscal year, the allocations for government debt interest were scheduled to reach $ 690 billion, while the figure has now been adjusted to $ 251 million, which led to an increase in the total budget deficit to 628 billion pounds after it was scheduled for 558 billion.

This is how the increase in government debt allocations and giving priority to them comes at the expense of reducing decisions for other spending items in the budget, most notably government investments and the purchase of government goods and services, which the Minister of Finance indicated by expecting allocations for the purchase of government goods and services to reach EGP 108 billion during the current fiscal year after it was scheduled at the beginning of the fiscal year of EGP 126 billion.

The same is true for government investment allocations, which the minister expected to reach 343 billion pounds after it was scheduled at the beginning of the fiscal year 376 billion, although it is natural that allocations for them increase in order to be able to keep pace with the increase in the prices of building materials and project construction requirements, and the shortage of government investment allocations from what was scheduled is not limited to the current fiscal year alone, but this is repeated since the fiscal year 2014/2013 and coincides with the army's assumption of power until the current fiscal year.

None of those nine fiscal years has the number of government investments mentioned in the budget law been achieved at the beginning of its implementation, which also contributed to the decline in interest in the government budget among many and the weak credibility of the figures contained in it.