Finance Ministry to create monetary supply: minister
Minister of Finance Hani Kadry - YOUM7 (Archive)

CAIRO: Minister of Finance Hani Kadry announced on Wednesday that the government is discussing creating a monetary supply rather than its current in-kind supply to better aid particular sectors and needy citizens.    

Kadry said that Egypt’s budget needs an additional 140 billion EGP in 2016 to increase expenses for the education, health and scientific research sectors.

In order to enact a ministerial plan to ration the energy supply, Kadry said the government will begin to amend energy prices, complete its smart card system, determine consumption rates to define the amount of energy needed to operate cars, and run mass transit vehicles on natural gas.

An estimated 99 percent of public sector companies will not benefit from applying the minimum wage rate, Kadry said, because they already exceed the value of applying the minimum wage rate of 1,200 EGP, Al-Ahram reported.

Kadry said the ministry has allocated 105 million EGP in order to apply minimum wage rates, according to Al-Ahram. The allocated amount for wages in the public budget has increased from 85 billion EGP to 185 billion EGP over the last four years, he added.

Dr. Alia Al-Mahdi, dean of the Faculty of Economics and Political Science at Cairo University, criticized the plan for a monetary supply system, saying, “the monetary supply will lead to a large increase in the price of goods.”

The large increase in prices would come from a high demand of goods along with possible added sums by retailers, she said.

Al-Mahdi said she conducted a field study in 2010 about the kind of supplies that Egyptians need, which found that 80 percent of families need in-kind supplies.

Concerning the minimum wage rate, Al-Mahdi recommended that the government apply minimum wages in parts over three years time.

Applying the minimum wage over three years would alleviate current deficits in Egypt’s budget, which is expected to reach 240 billion EGP by the end of current fiscal year, she said.

Additional reporting by Mona Diaa.

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