Daily News Egypt

Egypt takes actions to trim budget deficit - Daily News Egypt

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Egypt takes actions to trim budget deficit

Government is seeking loans, private sector investments, and to increase tax base to address budget gap


In the second annual Akhar Al-Youm Economic Conference on Wednesday, Egypt’s economic ministers have gathered to announce and explain their plans to stimulate the economy, generate additional revenues, and reduce the budget deficit.

Prime Minister Sherif Ismail said the government targets to achieve 1.5% in economic growth in FY 2015/2016; however, this is challenged by the budget deficit, lack of exports, scarcity of foreign current, suspended factories, and investment disputes.

With the aim of controlling the budget deficit, Minister of Finance Hany Kadry Dimian said the ministry is currently undertaking procedures to widen the tax base and to rationalise energy subsidies.

During his speech, Dimian announced that Egypt will receive $3bn loan from the World Bank in instalments over the period of three years.

Minister of Investment Ashraf Salman said during his speech that the economic plan should be directed towards the private sector investment, especially in the infrastructure sector.

Salman said the private sector is the first responsible party for increasing the unemployment issue because of being “a main source of the economic development”.

He said they aim to increase the percentage of the private sector in investments to reach 75% in FY 2015/2016, adding that the government targets to register $10bn in Foreign Direct Investments (FDI).

Discussing the issue of lands acquisitions in Egypt, Salman said his ministry amended a law to allow lands to be issued through the General Authority for Investments and Free Zones (GAFI).

Minister of Planning Ashraf El-Araby said during the conference that the government has allotted EGP 5bn in the budget to establish a sovereign fund. The government is also valuating unused assets, equivalent to EGP 5bn. So the capital of the fund will be EGP 10bn. El-Araby expected the capital of the fund to reach EGP 100bn.

El-Araby stressed the economic growth is not enough to achieve the desired development and the government has set an economic development strategy, which will be announced before the end of 2015.

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