Challenges that face financing SDGs in Egypt before and

Challenges that face financing SDGs in Egypt

before and after COVID 19 pandemic crisis

A S HRA F – N A HLA - LOBN A,FAT IM A /

S A I E GY P T

Background/rationale

Due to Covid 19 Governments across the world have taken emergency actions to support the

economy and to finance major public services, such emergency measures include budget

reallocations, issuing new loans, attracting private capital, investing in debt securities, and other

measures.

In Egypt a lot of measures have been taken to face the current situation, specially that Egypt is

already facing another challenge before Covid 19 represented in implementing a challenging

program for economic reform since 2016 to achieve SDGs and this impose a lot of challenges on

the Egyptian economy to achieve positive economic indicators.

WORKING GROUP ON PUBLIC DEBT | 2020 VIRTUAL MEETING | IMPLEMENTATION OF SDGS: EXPLORING THE ROLE OF PUBLIC DEBT AUDITORS 2

Objective

Determining the means that Egyptian government uses to finance the management of the

crisis so that the state doesn’t face a shortage in the daily life essential requirements and to be

able to provide any preventive and treatments methods needed .

Determine how to proceed with economic developing strategic plans in parallel with the

emergency economic measures taken to face Covid 19


Discussions

This presentation will focus on the following topics :

Challenges that faces Egypt in financing SDGs

Policies that are being implemented to finance these goals before COVID-19

Additional policies and measures carried out by the government in the light of COVID-19

SAI role during the current situation


ISSUES AND CHALLENGES


ISSUES AND CHALLENGES

First : Challenges that faces Egypt in financing SDGs


Before Covid 19: After COVID-19:

The main challenges that face Egypt before

COVID-19 is achieving positive economic

indicators in the light of implementing the

economic reform program since 2016 from

these indicators: achieve high growth

rate, reduce unemployment rate, reduce

inflation rate, reduce budget deficit,

reduce public debt and increase

Foreign reserve.

COVID-19 crisis impose additional challenges

that require developing additional funds to

finance SDGs, From these challenges:

•Reduction in foreign cash reserve

•Increase in public debt

•Increase unemployment rate

Second Policies that are being implemented to finance SDGs before COVID-19:

Egypt has successfully carried out some policies in regards of implementing the economic reform program since 2016 from these policies: floating the exchange rate, reducing energy and electricity subsidies, increase the revenue from taxes and reduce budget deficit .

Egypt had a very promising results as it was recorded in the following economic indicators in year 2019 compared to year 2018:

Growth rate: increased from 5.3% to 5.6%

Unemployment: reduced from 10% to 7.8%.

inflation rate: reduced from 14.4% to 9.2% .

Budget deficit: reduced from 14% from GDP to 8.4% , this will reduce the growth in public debt.

Net international reserve: raised to $45.4 billion that can cover Egyptian Exports for 9 months.

Foreign exchange resources increased from $71 billion to $90 due to rising in revenues of some sectors as exports, remittances of workers abroad, tourism, foreign investment and Suez Canal revenues.

Credit classification: credit classifications has improved from B to B+ according to fitch institution.

External debt: estimated to be $112 billion in 2019 that represents 37% from GDP, which is considered a positive record as it didn’t exceed the safe limits.


Third :Policies and measures carried out by the government in light of COVID-19:

Due to COVID-19 crisis and its negative impact on the economy, urgent policies have been taken by government and central bank to face the current situation; such as:

• supporting the most affected sectors, such as:

◦ Health sector

◦ Aviation sector

◦ Tourism sector

• Government decide to pay a monthly grant for irregular employees in any affected sectors and increase allocations for social security programs

• Central Bank reduce the interest-rate

• postponing the collection of loans

• lift the ban on dealing with defaulted clients.

• providing credit facilities to finance importing transactions.

• Limit cash transactions and facilitate tools and means of electronic payment.

• Decreasing some industry costs as natural gas and electricity costs

• Supporting exporters.

• Issuing new loan to finance public services and support Social Security program.


Forth : Egyptian SAI role during the current situation

Professional preparations had been made to enable SAI to review and control public debt. The state has facilitated the audit process by providing financial and economic data to auditors electronically to reduce the burden of office crowding and the risk of paper contact in a manner that guarantees the speed, accuracy and quality of performance; Consistent with the efforts made by the state to convert to "digital Egypt", especially in light of the Corona pandemic

In order to strengthen means of cooperation between the Egyptian SAI and the government ; In a way that contributes to establish the foundations of governance and control over the state budget, in a manner that helps establish the pillars of financial and administrative system, which in turn will help in raising the efficiency of public spending, achieving goals and improving economic performance indicators, and then effectively contributing to improving the standard of living of citizens and the services provided To them.

For the first time, the reports of the government financial information systems and electronic payment will be made available in a way that enables the SAI to examine the final accounts of the administrative authorities for the past fiscal year 2019/2020 electronically,

The relatively new electronic audit has been admitted as a more secured control method ,which in turn played a major role in auditing final accounts, financial statements , and balances of public debt for the year.

All these new trends have created what is now known as“ the new normal ” led by a new knowledge field, which has opened up a different horizon to enable auditors to carry out their work remotely.


Q & A

WORKING GROUP ON PUBLIC DEBT | 2020 VIRTUAL MEETING | IMPLEMENTATION OF SDGS: EXPLORING THE ROLE OF

PUBLIC DEBT AUDITORS10

QUESTIONS


Thank you!


Documents

Challenges that face financing SDGs in Egypt before and