That’s a wrap on the budget: The House of Representatives yesterday gave its final approval to the FY 2023-2024 budget and socioeconomic development plan after just two days of debate. Majority parties Mostaqbal Watan and Protectors of the Nation (Homat El Watan) — who together hold more than 350 of the chamber’s 596 seats — voted in favor of both the budget and the plan.

Approval among MPs was not unanimous: Wafd Party spokesman Mohamed Abdel Alim Daoud and Justice Party chair Abdel Moneim Imam yesterday said they were rejecting the budget, criticizing its “excessive borrowing.” Two other opposition parties, the Egyptian Socialist Democratic Party and the Reform and Development Party, had rejected the budget on the first day of the debate on the same grounds. Several independent MPs also took to the floor yesterday to criticize the government for its wider handling of the economic crisis —- with independent rep Mahmoud Badr saying the cost of living crisis meant that affording foods like red meat had become a “dream” for most people.

REMEMBER- The debt issue has made next year’s budget a controversial one among lawmakers. Gov’t spending is set to rise 34% y-o-y in FY 2023-24, with debt servicing marking the single biggest component of that. Amid a cost of living crisis, the government is also upping spending on social safety programs and subsidies, as well as on wages, commodity purchases, social support, public investment, education and health. The Madbouly cabinet is targeting a 7% budget deficit next fiscal year, down from a projected 8% this fiscal year.

Maait responded to critics: Finance Minister Mohamed Maait defended the budget to MPs at the end of the debate, pointing to the “exceptional” global economic challenges created by a high-inflation, high-rate environment in the wake of the Russia-Ukraine war. Interest rates on government borrowing have more than doubled to some 24%, Maait said. “We expect inflation and interest rates to drop at the end of the current year and when this happens we will do our best to make sure that society reaps the benefits,” he said.

FinMin has more in the pipeline to boost fiscal discipline: Maait said the executive regulations of the Unified Budget Act would be issued within weeks, after they’ve been reviewed by the IMF and other authorities. The bill, which was ratified last year, requires the government to present an annual medium-term budgetary and fiscal strategy to the House and set spending limits for each ministry. A cabinet committee is also working on turning around several loss-making government entities including the National Railway Authority, the National Media Authority, and the National Tunnels Authority, Maait added.

What’s next? The budget will now be sent to President Abdel Fattah El Sisi to ratify.

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