{"id":619401,"date":"2024-05-01T00:00:00","date_gmt":"2024-05-01T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2024\/05\/01\/a-look-at-egypts-infrastructure-spending-priorities-for-fy-2024-25\/"},"modified":"2024-05-01T00:00:00","modified_gmt":"2024-05-01T00:00:00","slug":"a-look-at-egypts-infrastructure-spending-priorities-for-fy-2024-25","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2024\/05\/01\/a-look-at-egypts-infrastructure-spending-priorities-for-fy-2024-25\/","title":{"rendered":"A look at Egypt\u2019s infrastructure spending priorities for FY 2024-25"},"content":{"rendered":"

What are the state's infrastructure priorities for FY 2024-25?<\/strong> Last week, Planning Minister Hala El Said presented<\/a> the government\u2019s socioeconomic<\/a>development plan (pdf)<\/a> for the next fiscal year in an address to the House of Representatives, while Finance Minister Mohamed Maait presented<\/a> the first-ever consolidated draft budget (pdf)<\/a> for FY 2024-25. The two documents give us our first real insight into the state\u2019s infrastructure priorities for the coming year.<\/p>\n

Remember<\/strong>:<\/strong> Budget season is going to be a bit different this time round, with the issuing of the first Public Government Budget<\/a>. The new budget \u2014 which does not replace the state budget \u2014 shows the budgets of all the state\u2019s economic bodies in addition to the state budget collated together. The first phase includes some 40 economic bodies<\/a>.<\/p>\n

The government plans to increase its FY 2024-2025 spending 29% y-o-y to EGP 3.9 tn<\/strong> 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\u2019s request to slow spending on infrastructure projects and rationalize fiscal policy, according to the Finance Ministry\u2019s analysis report (pdf)<\/a>. When taking into account the state\u2019s economic bodies, spending is estimated to read EGP 6.6 bn in the Public Government Budget. <\/p>\n

The state will be more selective when making public investments: <\/strong>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<\/p>\n

Urban development is among the government\u2019s top priorities: <\/strong>The government will allocate EGP 186 bn to urban development \u2014 which would account for 19% of public investments allocated for the next fiscal year \u2014 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.<\/p>\n

Some EGP 136 bn are earmarked for the oil and gas sector, <\/strong>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.<\/p>\n

As Egypt\u2019s fastest growing sector, ICT will receive EGP 85 bn in FY 2024-2025, <\/strong>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.<\/p>\n

The state wants to save up to USD 3 bn by localizing certain industries:<\/strong> 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.<\/p>\n

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

Fueling the green transition:<\/strong> 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. <\/p>\n

** You can get the full breakdown of the government\u2019s plan for the green economy<\/strong> in the coming fiscal year in our latest Going Green<\/a>.<\/p>\n

A nod to industrial zones: <\/strong>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.<\/p>\n

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