File photo: House of Representatives of Egypt.
The four political parties – the Egyptian Social Democratic Party, El-Tagamoa, Al-Adl and the Reform and Development Party – announced that they had voted against the draft government budget for the financial year 2022/23 which was approved by the House of Representatives on Tuesday.
The four political parties have about 30 seats in the 568-seat parliament, which is almost 6% of the total.
Following a two-day plenary debate on June 21, House Speaker Hanafy El-Gebaly announced that a majority of lawmakers had approved the budget and development plan, but declined to give reading the names of the political parties that refused to approve the budget.
Mona Abdel-Nasser, parliamentary caucus leader of the Egyptian Social Democratic Party, said the party rejected the budget for the 2022/23 fiscal year because it did not show the government would stop borrowing from abroad.
“The budget shows that foreign borrowing rates have reached an all-time high and this has forced the government to declare its intention to sell public assets in exchange for loan cancellations,” Abdel-Nasser said, adding that “The value of the budget deficit has also reached half a trillion Egyptian pounds and that is an alarming level.”
Abdel-Nasser also complained that the development plan prioritizes the construction, transport and real estate sectors, to the detriment of productive sectors like industry and agriculture.
“The plan shows that the government aims to invest EGP 500 billion out of a total of EGP 1.4 trillion in the construction, transport and real estate sectors, with a 35% increase in expenditure, while the investments for agriculture and industry have decreased significantly,” Abdel-Nasser said.
Atef El-Meghawry, the leader of the parliamentary group of the left-wing El-Tagamoa party, also announced that the party had voted “no” to the budget and the state plan.
According to El-Meghawry, the new budget discriminates against the poor and favors the rich. “The budget shows the government’s insistence on sticking to liberalization policies that favor the rich and come at the expense of the poor.”
El-Meghawry also expressed concern that international oil and wheat prices projected in the budget were too low and that this would increase the budget deficit. “For example, the budget set the price per barrel of oil at $80, while the trading price in international markets currently stands at $105,” El-Mehgawry said.
Abdel-Moneim Imam, deputy and president of the Justice party (Adl), also expressed his rejection of the budget and the plan.
According to Imam, the new budget and the plan do not match the ambitions of the Egyptians. He said debt service costs have become too high, now amounting to 8.2% of GDP, meaning a heavy debt burden for generations to come.
“This is a budget to be spent on servicing debt and not spending on productive sectors or on health care and education,” Imam said.
For different reasons, the Liberal Reform and Development Party rejected the party for allocating too much money to subsidies. Ayman Abul-Ela, the party’s parliamentary spokesman, lamented that the government refused to scrap subsidies in favor of cash transfers.
“Cash transfers will help the poor much more than grants,” Abul-Ela said.
Other opposition parties have approved the budget and the development plan.
Al-Wafd, Egypt’s oldest party, said it voted “yes” to the budget even though it fell short of the ambitions of most Egyptians. “In the midst of the current global economic crisis, triggered by the coronavirus pandemic and the war in Ukraine, we believe that this budget is the best option to address the negative impact of global economic crises on Egypt,” said said Al-Wafd’s parliamentary spokesman, Soliman Wahdan.
The three parliamentary majority parties of Mostaqbal Watan (Future of the Nation), the Protectors of the Nation (Homat Watan) and the Republican People’s Party also endorsed the budget, saying the government was able to overcome the coronavirus crisis and that its discretionary fiscal policies will also help Egypt overcome the Ukrainian crisis.
The next stage of the budget and development plan for the 2022/23 financial year must be ratified by President Abdel-Fattah El-Sisi before it comes into force on July 1.