Transcript Egypt… - Global Initiative for Fiscal Transparency

Egypt ……The Way To Transparency
Pre-Budget
Statement for the
state budget
Citizen Budget
Know Your State
Budget
of FY 2015/2016
for FY 2014/2015
Citizen Budget
Know Your State
Budget
for FY 2015/2016
1
Table of Contents
I.
Ministry of Finance Mission and Responsibilities
II.
Vision & Medium Term Macroeconomic Targets
III. Challenges
IV. Economic and Fiscal proposed policies
V.
Enhancing
transparency and Strengthening Public
Participation
MINISTRY OF FINANCE - MACRO FISCAL
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MOF Responsibilities
Taxes
MoF
Mission Statement
(Fiscal Stability, Economic
Growth and Social Justice)
Health, Education,
Infrastructure, Housing,
Transportation and
Social Packages
Citizen
Manages Public funds and allocates
them among citizens needs and
Plans and Prepares Egypt’s
priorities
budget and Public Domestic
Debt
P.S. The government aims at setting a program-based
budgeting framework and this will improve monitoring and
evaluation.
Ministry of Finance - Macro Fiscal Policy Unit
Design fiscal policy in line
with macroeconomic
framework
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Egypt Vision ...Investing in Egypt’s human capital
The government of Egypt is
designing Sound Economic
Policies for social inclusive
and
sustainable
environmentally
market
economies.
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In the past fiscal year, Egypt was confronted with a triple
deficit
GDP DECILNE
EXTERNAL DEFICIT
Real Annual GDP Growth
FISCAL DEFICIT
Current Account Deficit
excluding remittances and grants
4.7%
2008/2009
-12.7
2008/2009
-2.5pp
excluding commodity grants
12.4
(7%)
US$Bn
US$Bn (% of GDP)
2008/2009
+20Bn
+8.8pp
44.2
2.2%
-32.7
(15.8%)
2013/2014
2013/2014
2013/2014
Unemployment Rate
9.4%
2008/2009
Budget Deficit
Foreign Reserves
31.3
2008/2009
+4.9pp
Domestic Debt
644
(62%)
US$Bn
14.6B
n
EGPBn (% of GDP)
2008/2009
+23pp
13.3%
16.7
1700
(85%)
2013/2014
2013/2014
2013/2014
Source: Ministry of Finance, CAPMAS, Central Bank of Egypt
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Economic and Fiscal proposed policies
Egypt’s economic development strategy rests on three building blocks
6
Quantitative targets and underlying assumptions in the
2015/2016 budget over the medium term
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The most important financial challenges we face…
Egypt’s Path into a Virtuous Circle...
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Economic and Fiscal proposed policies
 A gradual phasing out of energy subsidies
 Introduction of smart cards for gas and fuel distribution
 Wage-bill reforms to contain public sector wages
 Savings generated by both revenue and expenditure measures will be
rechanneled to bolster social protection programs and to help meet the
constitutional mandate requiring the government to spend 10% of GDP
on health, education and research and development (R&D) by FY
2016/17
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Why Restructuring Subsidies ?
 Facing problems
to finance
Amount of Fuel Subsidies received by
the Wealthiest 20% of Society
90%
80.1%
80%
energy products.
70%
59.2%
60%
 Most of the energy subsidies
goes
to
segments.
the
upper
income
50%
38.1%
40%
30%
22.3%
19.0%
20%
10%
0%
Gasoline
MINISTRY OF FINANCE - MACRO FISCAL
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Natural Gas
Electricity
LPG
Kerosene
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Increasing Expenditure on Health and Education as
Mandated by January 2014 Constitution
In FY14/15 budget public expenditure on health and education increased relative to
expenditure on energy subsidies
Expenditure on Health and Education exceeds Expenditure
on Energy Subsidies (Electricity and Petroleum Materials)
in FY14/15
Expenditure on Energy Subsidies (Electricity and Petroleum
Materials) exceeds Expenditure on Health and Education in
FY12/13
180
180
160
160
140
140
Petroleum
Subsidies,
120.0
100
80
Expenditure
on Education,
73.1
(20.4%)
120
LE Billion
LE Billion
120
(13.3%)
Petroleum
Subsidies,
100.3
80
60
(12.4%)
40
0
100
(12.7%)
60
20
Expenditure on
Education, 105.3
Expenditure on
Health, 31.6
(5.4%)
Electricity
Subsidies,
8.6
40
Expenditure
on Health,
51.6
20
(6.5%)
(1.5%)
Electricity
Subsidies,
27.2
(3.5%)
0
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The government is promoting an investment program targeting
the sectors with the highest potential.
Energy/
Mining
Housing/
Utilities
Agriculture
Tourism
Industry
Transportation/
Logistics
ICT
Mix of mega-projects and initiatives with high
social returns
Medium term
growth
target: 6%
OBJECTIVES




Improve the living conditions of the people
Promote quick job creation through the development of labor intensive
sectors
Address Egypt’s widening infrastructure/energy gap and reduce power
and water shortages
Initiate a move toward more diversified and high value added exports
The most important financial challenges (continued)
Increased government spending on health, education and scientific research is
essential to invest in human development.
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Strengthening Public Participation
The Ministry of Finance believes that transparency, disclosure and the
dissemination of reliable information is a crucial element in the ongoing
dialogue with the public , who has the right to comprehensive, and useful
information on how the government will manage the generated public funds
and net savings by the aforementioned reforms.
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Strengthening Public Participation
The community outreach strategy is grounded on three main
Aspects :
I.
Effective promotion of the reform measures undertaken by the Ministry of
Finance.
II.
Ongoing dialogue of current issues (indirect defense).
III. Developing a mechanism to survey citizens’ reactions (monitoring
feedbacks).
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Strengthening Public Participation
The importance of informing citizens on the reform measures taken by the
ministry and about the general role of the Ministry of Finance?
I.
Communication and transparency will encourage citizens to bear the
burden of reform policies and fiscal consolidation.
II.
Highlighting the importance of the role played by the Ministry of Finance in
devising the fiscal policy framework.
III.
Rebuilding citizens’ trust in the performance of both the government and
the Ministry of Finance.
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Strengthening Public Participation
 Serious steps were undertaken on the way to budget transparency to
inform the general opinion about the reasons behind bold structural
reforms.
First, MOF was very
keen on releasing
the
“Citizen’s
Budget” in October
2014 ,
which
is
a
simplified form of
the
2014/2015
state budget to be
easily understood
by ordinary citizens.
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Strengthening Public Participation
 Citizen budget initiative offers citizens at large an opportunity to learn
about government operations and to deliberate, debate, and influence the
allocation of public resources in the future.

Citizen Budget Objectives (Raising public awareness and transparency)

Tools of communication
–
The
availability
of
citizen
budget
at
the
website
(www.budget.gov.eg) , aims to encourage citizen's participation in
the decision making process.
–
Facebook, Twitter, The Ministry Blog
–
The Financial Monthly Bulletin
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Strengthening Public Participation (continued)
 Moreover, MOF launched an
interactive
website
that
displays the budget outline
and the main measures
adopted by the government.
http://www.budget.gov.eg/
 Additionally, a simplified onepage brochure ‘handout’ was
distributed
with
the
newspapers to explain the
major outline of the budget.
Ministry of Finance - Macro Fiscal Policy Unit
‫موازنة المواطن‬
‫مع بعض نكمل المشوار‬
2016/2015 ‫لعام‬
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Strengthening Public Participation (continued)
 In order to make the budgetary
process more transparent,
inclusive and responsive and to
welcome feedback from all key
stakeholders, the Ministry of
Finance organized a one-day
workshop to gather representatives
of the government, academia, civil
society, the business community
and the media.
 The purpose of the event was to
discuss the economic and fiscal
challenges underlying the
formulation of the FY 2015/2016
budget, as well as the assumptions
and targets on which the budget is
based.
Ministry of Finance - Macro Fiscal Policy Unit
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MOF future Initiative to improve public participation
in the budget process.
 MOF is in the process of providing a comprehensive sets of fiscal data in a
simplified and user friendly wayto Civil Society, NGOs, Political Parties and
the Public via BOOST tool sponsored by the World Bank.
 Providing training to citizens, CSOs, journalists, and university students on
public finance and public financial management principles and most recent
economic policies, to enhance the public awareness.
 Develop mechanisms for participatory budgeting (to include monitoring and
evaluation of participation, performance & impacts of selected projects & of
participation tools).
 Applying Programme Based budgeting.
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Strengthening Public Participation (continued)
 Moreover, MOF launched Citizen Budget
FY 2015-2016 for the second consecutive
year on the 29th of September 2015
entitled "Hand in Hand, We Complete the
Journey" to inform citizens about key
features of the 15/16 budget and shed
light on the planned fiscal policies to be
implemented in the medium and long
term.
Ministry of Finance - Macro Fiscal Policy Unit
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Strengthening Public Participation (continued)
 In addition, the Ministry of Finance
organized a one-day workshop(as the
second event in a series of workshops)
divided into three main topics, which are:
 Growth& Employment
 Fiscal reforms
 Social protection(GASC& Solidarity and
dignity & healthcare for disabled)
 This
workshop
gathered
representatives from the government,
academia, civil society, the business
community and the media to encourage
citizens' participation in the decisionmaking process, and to discuss the
assumptions, targets, along with the
economic and fiscal challenges
underlying the preparation of the FY
2015/2016 budget.
Ministry of Finance - Macro Fiscal Policy Unit
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Strengthening Public Participation (continued)
 Additionally,
simplified
Budget
a
Citizen
Booklet
targeted for children
was distributed to
explain the budget.
Ministry of Finance - Macro Fiscal Policy Unit
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