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Tuesday, 9 June 2020

Gov’t spent EGP 63 bn of covid-19 stimulus program as FinMin provides breakdown

Egypt has deployed EGP 63 bn of its covid-19 stimulus program: The government has spent EGP 63 bn of the EGP 100 bn it earmarked for a stimulus package to tackle the economic fallout from covid-19, the Finance Ministry said in a statement yesterday, which provided a breakdown of how the money has been allocated.

Food security: Amid reports global players were slowing exports of key food commodities, the Supply Ministry received EGP 28.6 bn to ensure sufficient provisions of staple goods, with EGP 16 bn allocated for purchasing local wheat, the statement says. The General Authority For Supply Commodities was provided with EGP 6 bn to buy imported wheat. Another EGP 3.7 bn was spent on transport, water and sewage infrastructure, health insurance, textiles, and culture, the ministry added without providing a breakdown.

Support for manufacturers: Some EGP 16.6 bn was spent on providing assistance to industry, alongside cuts to gas and electricity prices and a three-month real estate tax holiday, the ministry said. The government provided EGP 3 bn to exporters via the Export Development Fund. The tourism and civil aviation sectors saw an EGP 5 bn investment from the government, another EGP 10 bn was spent paying contractors and suppliers, and EGP 3 bn went towards roadworks.

Covid-19 healthcare costs: The government has spent EGP 11 bn on the healthcare sector to set up quarantine wards and provide medicines, supplies, and bonuses to medical staff, among other costs. An EGP 2.6 bn emergency fund was set up for front-line workers treating patients, and EGP 400 mn was spent training medical students to work on the frontlines in hospitals.

The pandemic has cost the Egyptian economy EGP 130 bn in lost income and the government has seen a EGP 124 bn shortfall in tax and non-tax revenues since the beginning of the outbreak, the statement said. The economy is expected to grow at a 4% clip this fiscal year, down from 5.8% projected before the covid-19 outbreak, according to the latest government forecasts.

Background: President Abdel Fattah El Sisi allocated an EGP 100 bn stimulus and bailout package in late March to insulate the economy from the impact of covid-19 outbreak. Yesterday’s announcement means that the government has spent around EGP 20 bn of the emergency funding since the first week of May.

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