What are the state’s infrastructure priorities for FY 2024-25? Last week, Planning Minister Hala El Said presented the government’s socioeconomicdevelopment plan (pdf) for the next fiscal year in an address to the House of Representatives, while Finance Minister Mohamed Maait presented the first-ever consolidated draft budget (pdf) for FY 2024-25. The two documents give us our first real insight into the state’s infrastructure priorities for the coming year.

Remember: Budget season is going to be a bit different this time round, with the issuing of the first Public Government Budget. The new budget — which does not replace the state budget — shows the budgets of all the state’s economic bodies in addition to the state budget collated together. The first phase includes some 40 economic bodies.

The government plans to increase its FY 2024-2025 spending 29% y-o-y to EGP 3.9 tn in the draft state budget. This time round, public investments will also be capped at EGP 1 tn, in response to the International Monetary Fund’s request to slow spending on infrastructure projects and rationalize fiscal policy, according to the Finance Ministry’s analysis report (pdf). When taking into account the state’s economic bodies, spending is estimated to read EGP 6.6 bn in the Public Government Budget.

The state will be more selective when making public investments: Government-funded investments will focus on ongoing national projects that are at least 70% complete and expected to enter the operational phase within a year or two at most, according to the Planning Ministry. The plan notes that the government will only invest in new national projects if deemed necessary or approved by the cabinet

Urban development is among the government’s top priorities: The government will allocate EGP 186 bn to urban development — which would account for 19% of public investments allocated for the next fiscal year — where EGP 50 bn will go to the real estate sector, EGP 45 bn to water services, and EGP 91 bn to sanitation, the socioeconomic development plan showed. The plan includes developing 471 drinking water stations, 100 pumping stations, and 248 sewage treatment plants.

Some EGP 136 bn are earmarked for the oil and gas sector, where natural gas will be distributed to houses under the second phase of the Decent Life initiative, oil terminals and refineries revamped, and oil pipelines completed.

As Egypt’s fastest growing sector, ICT will receive EGP 85 bn in FY 2024-2025, with the target of increasing revenues from outsourcing and tech consulting activities to USD 8 bn within three years to end in 2026. The plan also aims to accelerate the digitization of government services, such as the issuance of e-visas, real estate taxes, and universal health ins.

The state wants to save up to USD 3 bn by localizing certain industries: The government wants to ramp up efforts to localize the manufacturing of iron, steel, paper, pharma products, pipes, and boilers, among other products in the next fiscal year in a bid to narrow the EGP 25.7 bn trade deficit by 11% by saving USD 3 bn.

Driving up exports: The plan also aims to accelerate export-oriented industries, such as food, textile, engineering, and chemicals, by targeting 20% more industrial exports.

Fueling the green transition: The government said it will focus on environmentally-friendly industries that support sustainable development such as electric vehicles, green hydrogen, solar panels, wastewater treatment and seawater desalination plants, and the manufacture of energy-saving devices.

** You can get the full breakdown of the government’s plan for the green economy in the coming fiscal year in our latest Going Green.

A nod to industrial zones: The government will continue working on upgrading the Rubiki Leather City, along with industrial zones in Sohag and Qena governorates in the coming fiscal year. It also plans to upgrade the infrastructure in industrial complexes including Damietta Furniture City, textile industrial zones in El Mahalla El Kubra and Kufr Al Dawar, and the plastic industries complex in Al Aamiriya.

Your top infrastructure stories for the week:

  • DACT, Rowad to work on Tahya Misr 1 container terminal: DamiettaAllianceContainer Terminals (DACT) and Rowad Modern Engineering have inked an agreement to develop the superstructure of Damietta Port’s Tahya Misr 1 container terminal. (Statement)
  • Suez Canal Authority, Hyundai discuss investments: The Suez Canal Authority and Hyundai Corporation have opened talks on avenues for investment in the canal, including the distribution of spare parts for vessels transiting the waterway as well as the offering of rapid repair services and maintenance at its entrances. (Statement)
  • Orange, Huawei bring the Cloud to Egypt: Orange and Huawei have teamed up to launch Huawei Cloud services in Egypt. (Statement | pdf)
  • Pricier hydropower? The Egyptian Electricity Holding Company is looking into raising the price of hydropower in FY 2024-25 following the float of the EGP. (Al Mal)
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