House signs off on FY 2026/27 budget, but demands macro reality check

Good morning, ladies and gents. It’s a quieter morning as Egypt continues to ride high from yesterday’s knockout performance at the World Cup, but we have three pieces worth your time.

Fawry has a TPA licence — and the pricing trap that has caught existing firms is the one its model is built to avoid. We spoke to several industry players to get a full read on where the third-party administrator licence puts Fawry between patients, providers, and payers.

In other news, the government is moving to narrow the planned 14% VAT on leased office space, three officials tell us — potentially keeping factories and buildings providing direct services to citizens outside the net.

You don’t want to miss our deep dive in Going Green. A mandatory carbon market is meeting an exchange that has seen only six trades in 22 months, with credits at 17x global rates and brokers required. We have the full read, with insight from industry insiders, in the news well, below.

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Budget clears the House

The House of Representatives gave its final nod to the FY 2026/27 budget and development plan, sending the Planning and Budget Committee’s recommendations to the government for implementation after two weeks of plenary debate, according to a statement.

What MPs want fixed: Drafted before the regional war escalated, the budget banks on an exchange rate of EGP 47 to the USD and oil at USD 75 per barrel. MPs are requesting more realistic assumptions based on actual execution rates, alongside strict adherence to constitutional spending minimums.

Tighter fiscal governance: Lawmakers want a durable general tax law rather than relying on piecemeal tax facilitation packages and are asking for a seat at the table during early “public consultations” for future financial legislation. The committee is also pressing the government to tighten oversight on customs exemptions, finalize the AI-driven property-tax digitization, submit the approved medium-term budget framework annually, and close loopholes in the state wage-ceiling system.

REMEMBER- The draft budget was referred to the House in April, with the government targeting EGP 4 tn in revenues, EGP 5.1 tn in spending, EGP 3.5 tn in tax receipts, a 5% primary surplus, and a 4.9% overall deficit. The bigger fiscal story is still the same: Finance Minister Ahmed Kouchouk has been promising no new taxes while leaning on base-broadening, compliance, and follow-up tax packages to lift revenues.

A clean break

The new company being carved out of Ghazl El Mahalla will be launched next month, and the government will begin receiving offers from interested investors, State-Owned Companies Unit head Hashem El Sayed tells EnterpriseAM. The company will house new factories — which were built under a state-backed EGP 35 bn modernization program — and could either be offered to a strategic investor or listed on the EGX, El Sayed says.

Dividing the company into two entities is meant to separate the new capacity from the legacy burden. The first entity is a leaner newco with upgraded factories and a limited workforce, and the second is the legacy company that will undergo a separate restructuring. The original company carried heavy liabilities, making it difficult to reel in local and foreign capital — the split will make the new company more investable, El Sayed explains. The new company is also expected to be the world’s largest spinning company by capacity, he says.

IN CONTEXT- El Sayed told us in April that Ghazl El Mahalla could be split into two companies. The split — which he tells us only took three months to execute — is part of the government’s wider push to make it easier for the private sector to enter public assets, either through strategic stake sales, EGX listings, or management through the Sovereign Fund of Egypt. The government is also keeping the door open to strategic sales if offers match fair-value studies.

ALSO- Four more state-owned companies are set to be registered on the EGX this week, El Sayed says. Oil-sector offerings will also continue through the summer, with investment banks being appointed for the transactions, he adds. El Sayed had already informed us earlier this month that a government committee was expected to approve the temporary listing of four oil companies as the privatization pipeline tries to regain momentum to reach its USD 4.5 bn proceeds target over the next three years.

Blurring public lines

The Egypt Healthcare Authority (EHA) is eyeing an EGX listing for Green Lotus, Al Mal reports, citing an unnamed government official. The new investment arm is still in the process of being set up, and the authority is aiming to get it off the ground before year-end — ahead of the IPO — though details around the size and timeline of the offering remain under wraps. Green Lotus is expected to serve as the authority’s commercial and investment vehicle, helping to bring in private-sector partners and channel capital into healthcare assets and investment funds, the official says.

ICYMI- The move comes as the EHA lays the groundwork for institutional backing, recently signing a protocol with the Financial Regulatory Authority to develop sustainable healthcare financing models. The government has been expanding private participation in healthcare well beyond Green Lotus. We reported in February that the pipeline of private-participation prospects has grown to 62 projects, up from seven, spanning flagship hospitals including Sheikh Zayed Specialized and Galala.

Back up to speed

Gas flows from Israel’s Tamar and Leviathan fields to Egypt rose 17% over the past few days to 1 bcf / d, following a temporary dip to an average of 850 mmcf / d tied to routine maintenance at both fields, Al Arabiya reports, citing an unnamed government official.

The status: Israeli gas now covers some 15% of our daily gas needs, even as the Oil Ministry pushes new exploration and brownfield development at existing fields to lift domestic output. Local production currently sits at around 4 bcf/d against consumption exceeding 6.7 bcf / d — a daily deficit of roughly 2.7 bcf / d that will widen as summer electricity demand peaks.

New Arab League chief

Former Foreign Minister Nabil Fahmy has been appointed secretary-general of the Arab League, succeeding Ahmed Aboul Gheit, according to a Foreign Ministry statement. Fahmy’s five-year term will begin 1 July.

PSA-

WEATHER- It’s another warm day in Cairo today, though it may get foggy in the early morning , with a high of 34°C and a low of 23°C, according to our favorite weather app.

It’s nicer in Alexandria, with a high of 29°C and a low of 21°C.

The big story abroad

There appears to be some headway on the US-Iran front, as Washington temporarilyauthorizes Tehran to sell oil in USD for two months — a move US Vice President JD Vance noted coincides with Iran's agreement to grant inspectors access to its nuclear sites. The Iranian Foreign Ministry denied the claim.

Meanwhile, UK Prime Minister Keir Starmer announced he is stepping down, potentially setting the stage for Labor Party frontrunner Andy Burnham, who was sworn in as an MP last week. A timetable outlined by Starmer could see Burnham take office by 17 July, becoming the country’s seventh leader in ten years.

SpaceX has good news… Rocketmaker and AI player SpaceX locked in a computing power agreement worth up to USD 6.3 bn with open-source AI startup Reflection, which will pay Elon Musk’s company USD 150 mn per month to access its Colossus 2 data center. This follows similar computing power-related plays with giants of the US AI scene, namely Anthropic, Google, and Cursor.

…and bad news: SpaceX lost USD 400 bn in market value, a twist of fate after its landmark debut on Wall Street. The dip was part of a wider tech selloff triggered by expectations that the Federal Reserve will hike rates as soon as September — US government bond yields climbed sharply.

*** It’s Going Green day — your weekly briefing of all things green in Egypt: EnterpriseAM’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: We unpack why the Financial Regulatory Authority was forced to grant NBFIs a six-month lifeline on mandatory carbon reporting, revealing how the Egyptian Climate Exchange functions less like a transparent market and more like an illiquid, overpriced black box.