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Thursday, 31 May 2018

Cabinet signs off on EGP 70 bn overdraft for FY2017-18 state budget

CABINET WATCH- The Ismail Cabinet signed off yesterday on an EGP 70 bn overdraft for the FY2017-18 state budget to cover “necessary expenditures,” according to a statement. The statement does not provide further details on the decision, but Vice Minister of Finance Mohamed Maait had told Enterprise last week that Cabinet was looking into raising the budget’s overdraft on account of higher oil prices. The government had assumed oil would average EGP 55/bbl but Egypt has reportedly been importing fuel at USD 75/bbl as oil now trading at a high not seen since 2014.

The Council of Ministers also signed off on a USD 500 mn loan agreement with the World Bank aimed at supporting the state’s K-12 educational reform strategy. The new system will be implemented as of the new academic year starting in September for kindergarten and students in the first years of primary and secondary education. The Education Ministry plans to do away with the education system currently in place by 2026, minister Tarek Shawki had said earlier this week. The revamp is expected to cost a total USD 2 bn when all is said and done.

New financing for development of electricity grid: The government has allocated EGP 25 bn to develop the country’s electricity grid over the next two years, Electricity Minister Mohamed Shaker told reporters yesterday, according to Al Masry Al Youm. Ministers also signed off on a USD 198 mn loan from the Arab Fund for Economic and Social Development earmarked for the nation’s power grid.

Also at yesterday’s cabinet meeting, ministers approved:

  • The Military Production Ministry’s MoU with China’s GCL Group to establish a USD 2 bn solar panel factory;
  • Taking the necessary measures to select a company to manage and operate the Grand Egyptian Museum;
  • A bundle of decisions and recommendations from the ministerial committee for the resolution of investment disputes;
  • A presidential pardon for an unspecified number of prisoners ahead of Eid Al Fitr.

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