Two billion pounds additional appropriation in Egypt’s budget for the “Sovereign Fund”

The Egyptian Parliament approves a law opening an additional credit of two billion pounds in the public budget (Getty)

Board approved Egyptian parliament Sunday, finally, on a bill submitted by the government to open additional credit In the general budget For the state, for the fiscal year 2020-2021, with a value of two billion pounds in Chapter Seven of the budget (possession of domestic and foreign financial assets), and an increase in the state’s public resources in Chapter Five (borrowing) with the same amount.

The head of the Parliament’s Plan and Budget Committee, Fakhri El-Fiqi, claimed that “the draft law aimed to take some measures that stimulate economic activity, in the context of limiting the negative effects of the repercussions of the Corona virus outbreak on the Egyptian economy, and boosting production in some of the affected sectors.”

Al-Fiqi stated that the state’s economic bodies and units are among the most affected by the spread of the Corona pandemic due to the decrease in their revenues, which in turn led to the total or partial cessation of their activities, and the weakening of their ability to fulfill their obligations, especially with regard to paying the wages of their workers, or paying other obligations such as Domestic and foreign loans.

For his part, the Minister of Finance, Mohamed Maait, said that the additional appropriation request will be directed in favor of “Egypt Sovereign Fund“, Which is not subject to any form of oversight, and that reports directly to President Abdel Fattah El-Sisi, in order to fulfill many obligations towards the parties affected by the repercussions of the Corona pandemic.

While the Speaker of Parliament, Hanafi Jabali, rejected a proposal submitted by MP Mahmoud Qasim regarding mentioning the party to which the additional appropriation (the sovereign fund) will go, saying that “the explanatory memorandum of the bill will indicate where this appropriation will be directed.”

According to a report of the Parliament’s Plan and Budget Committee, when Law No. 85 of 2020 was issued, linking the state’s general budget for the fiscal year 2020-2021, it was taken into account that about 4 billion and 155.3 million pounds were included in the general reserve listed in the section “Possession of financial and foreign assets.” The ministry raised sums totaling about 3 billion and 93 million pounds.

The report added that this amount included the provision of an amount of two billion pounds on September 30, 2020, under the account of the Ministry of Finance’s contribution to the “Egypt Sovereign Fund,” in light of the President’s mandate to complete the fund’s capital, which had a significant impact on the weakening of the public treasury’s capacity. For the state to fulfill the requests of economic units and bodies

As a result of the increase in the appropriations for the section on “possession of financial and foreign assets,” in the current fiscal year’s budget by two billion pounds, that increase was financed through borrowing and issuance of securities, other than stocks, thus increasing the public budget deficit by about 0.03% of GDP.

The House of Representatives had approved a government amendment to the law establishing the “Egypt Sovereign Fund”, which aims to legalize the procedures for transferring the exploited and unexploited assets of the state to the fund, so as to include the management of state funds and assets, and the entities, entities and companies affiliated with it, or which are entrusted with its management, or which The state contributes to it.

The amendment protected the decisions of the President of the Republic to transfer the ownership of assets to the fund from judicial appeal, which was limited to the owner or the fund itself, and not to file lawsuits to invalidate the contracts concluded by the fund, or the actions it takes to achieve its goals, or the measures taken based on those contracts, or the dispositions, Except from the parties to the contract and not others.

It is noteworthy that the Minister of Planning and Economic Development, Hala Al-Saeed, told Parliament that “the fund will be an alternative to borrowing from abroad, especially since Egypt is a country that needs to develop its resources and faces a financing gap.” And others, its ownership has already been transferred to the sovereign fund, and 4,800 untapped assets are being counted to consider transferring their ownership. ”
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