Government postpones costly projects after local currency depreciation

According to Daily News, the Egyptian government issued 11 new decisions aimed at curbing state spending, including halting costly new projects, as the Egyptian pound struggles against foreign currencies.

 

The measures, which were detailed in the government’s official gazette, include halting spending on new projects requiring US dollars and requiring state entities to seek approval from the Finance Ministry and the Central Bank before allocating foreign currency.

 

The steps come as Egypt suffers a shortage in foreign funding in the aftermath of Russia’s invasion of Ukraine. Authorities have devalued the Egyptian pound three times in the past year, eventually securing a $3bn International Monetary Fund loan program.

 

The government decree didn’t give further details on what projects might be affected.

 

The decree also prohibits non-essential travel by government and state agency officials without prior approval from the prime minister. It exempts officials from the health sector, state agencies that procure essential commodities, and the defense and interior ministries.

 

The decisions also stipulated that the Minister of Finance present a periodic report every two months to the Cabinet on the state’s commitment to these decisions and their results.

 

The decisions apply to all budgets of entities included in the state’s general budget (administrative apparatus / local administration, public service bodies, and economic public bodies) from the date of implementation until the end of the fiscal year 2022/23.

 

The decisions do not apply to the Ministry of Health and Population and its affiliated bodies, university hospitals, other bodies in charge of health services, agencies in charge of procurement of ration commodities, agencies in charge of procurement of oil and gas and their derivatives, the Ministry of Interior and its affiliates, the Ministry of Defense and its affiliates, the Ministry of Foreign Affairs, and debt service in the authorities’ budgets, appropriations included in the authorities’ budgets for the treatment of workers and non-workers (such as students), subsidies paid to workers and others, security pensions, financial allocations listed to support food commodities, and cash compensation for workers in remote areas.

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