Sisi refuses 2014-15 budget, argues soared deficit
President Abdel Fatah al-Sisi - YOUM7 (Archive)

CAIRO:  “I cannot ratify such budget that features more than 300 billion EGP in deficit and surges public debts to more than 2 trillion EGP,” President Abdel Fatah al-Sisi during the graduation ceremony of a new batch of Military Academy cadet Tuesday.

Sisi discussed the budget with the Ministers of Finance, Trade, and Planning Monday to discuss the budget deficit. They also discussed finding probable solutions of decreasing the budget without confrontation with the public opinion.

“Egypt is currently dealing with internal and external challenges,” he said and that the internal challenges are represented in economic and security problems.

The soared budget deficit, categorical demands, the lack of required money liquidity, and public debt are the major economic challenges, he said. The current financial situations could not bear the categorical demands.

The aid and loans from Gulf countries after the June 30 Demonstrations were the major factors in overcoming the economy crisis in Egypt and in providing the citizens’ growing demands. There needs to be urgent rationing for expenses, consolidation of Egypt’s ranks along, and more exerted effort in work in the upcoming phase to overcome economic crisis, he added.

“As for me, not only will I decline half of my salary, but I will also donate half of my properties to fund Egypt,” Sisi promised and called for rationing expenses and putting categorical demands aside.

Rationing public expenditures and increasing financial revenues are the major factors to ease the budget deficit, along with controlling public debts, former head of the Sadat Academy for Management Sciences Abdel Muttalub Abdel Hamid told The Cairo Post.

The first aspect rationing expenses is represented by lifting a large part of subsidy, restructuring the wages system, and decreasing transfer expenditures “including the debts interests and subsidy” to surround budget deficit, Hamid. The other kind of expenditures” true expenditures” could positively impact the economy.

The true expenditures are represented in the financial allocation in the budget for health, investments, and education, he said, excluding the government’s intension to apply austerity plans in the upcoming period.

The second aspect of “increasing financial revenues” will be through increasing Egypt’s revenues of taxes, boosting Egypt’s profits of tourism, new investments, selling parts of land, and including the private sector into societal responsibility, he said.

As for public debt, the core solutions are represented in spacing out the debts and offering long-term treasury bills and bonds along with activating economy, he recommended.

Following Sisi’s statement, an inside source at the Ministry of Finance told Reuters that the ministry will address decreasing budget deficit to 10.5 percent of Gross Domestic Products (GDP), rather than the scheduled 12 percent of 2014-15 draft budget.

Decreasing the budget deficit will be done by rationing subsidy along with increasing tax revenues, he concluded.

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