Egypt's Finance Minister Reports 2.5 Trillion EGP in Public Revenue with Non-Tax Dominance

Egypt's Finance Minister, Dr. Mohamed Maait, has announced that the country's public revenue has reached 2.5 trillion EGP, with a majority stemming from non-tax sources. This significant figure reflects the government's efforts to diversify its revenue streams amid ongoing economic challenges.

On the expenditure side, Egypt's public spending has climbed to 3.8 trillion EGP, marking a substantial 23% growth rate. This increase highlights the government's commitment to various development projects and social programs aimed at improving the quality of life for its citizens.

Egypt's public revenue and expenditure figures have significant implications for the country's economic stability and growth. The government's ability to manage its debt and finances effectively will impact the quality of life for its citizens and the overall economic development of the country.

In a bid to manage the state's budget deficit and repay existing debt obligations, the Ministry of Finance has planned 26 treasury bills (T-bill) and bond auctions in June, with a total value of 418 billion EGP. This includes 16 treasury bill auctions valued at 390 billion EGP and 10 bond auctions worth 28 billion EGP.

The outstanding balances of local treasury bills and bonds reached approximately 4.966 trillion EGP as of January 2024. Of this, the outstanding balance of treasury bills amounted to approximately 2.734 trillion EGP, while the outstanding balance of treasury bonds was around 2.232 trillion EGP.

Banks operating in the Egyptian market play a vital role as investors in the treasury bills and bonds regularly issued by the government. The government has introduced incentives to enhance the 'Primary Dealers' system for government debt instruments, aiming to invigorate the government securities market and reduce the debt service burden.

Foreign assets with the Central Bank of Egypt (CBE) stood at 1.883 trillion EGP at the end of April, while foreign assets with banks amounted to 1.195 trillion EGP. Net foreign assets (NFAs) hit a negative 174.385 billion EGP in April, compared to a negative 199.652 billion EGP at the end of March. Foreign liabilities with the CBE and banks totaled 32.523 trillion EGP.

The budget for the fiscal year 2024-2025, which begins on July 1, will include a 20% increase in subsidy value. The government has decided to rationalize subsidies on some commodities, citing the rise in the value of the subsidy offered. The actual cost of a loaf of bread has reached 1.25 EGP, although it is sold for just five piasters. The total bread subsidy figure has reached 120 billion EGP.

Dr. Mohamed Maait emphasized the importance of strategic planning and comprehensive studies to tackle economic and financial problems effectively. He noted, *'This decision contributes to achieving the Ministry of Finance's strategic objectives of managing the debt portfolio in a balanced manner. It helps reduce the cost of government debt service and minimizes refinancing risks while ensuring the financing needs of the state budget are met.'*

Egypt's financial situation is marked by significant revenue generation from non-tax sources and a notable increase in public expenditures. The government faces economic challenges, and strategic planning and effective debt management remain essential to sustaining growth and improving the quality of life for Egyptians.

Key Takeaways

• Egypt's public revenue reaches 2.5 trillion EGP, mostly from non-tax sources.
• Public spending increases 23% to 3.8 trillion EGP, driven by development projects and social programs.
• Gov't to conduct 26 T-bill and bond auctions in June, worth 418 billion EGP, to manage debt and budget deficit.
• Outstanding balances of local treasury bills and bonds reach 4.966 trillion EGP as of January 2024.
• 2024-2025 budget includes 20% increase in subsidy value, with a focus on rationalizing subsidies on certain commodities.