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Wednesday, 19 January 2022

Public sector minimum wage to rise 12.5% from July

SMART POLICY- El Sisi raises public-sector minimum wage to EGP 2.7k: The monthly minimum wage paid to public sector workers will rise by 12.5% from July on the instruction of President Abdel Fattah El Sisi. An Ittihadiya statement yesterday said that the president had told the Finance Ministry to raise the minimum wage from 2.4k to EGP 2.7k per month.

The new wage is set to come into effect at the beginning of the next fiscal year in July and will be included in the FY2022-2023 budget, Magdy El Badawy, a member of the National Council for Wages (NCW), confirmed to Enterprise.

This is the third public sector wage hike since El Sisi took office in 2014 — and the second raise in two years. The minimum wage for public sector employees increased to EGP 2.4k last July from EGP 2k in FY2019-2020.

Annual raises set to continue: Public sector employees will receive the same annual raise as last year, according to the statement. Last year civil servants had their basic salaries hiked by 7% and other public sector workers received a 13% raise. Pension payouts, meanwhile, were raised 13%. Unspecified additional bonuses will be put in place for all public sector employees at a cost of EGP 18 bn, yesterday’s statement read

How will this affect the private sector? Whether or not private sector firms will be compelled to raise wages at the same time will be decided by the NCW in the coming months, Elbadawy told us.

Some private companies are struggling to implement the last wage hike: Thousands of private sector firms haven’t yet brought wages into line with the current EGP 2.4k minimum wage, which came into effect for the private sector at the start of 2022. The NCW has granted thousands of temporary exemptions, allowing companies to continue paying the old EGP 2k minimum wage until mid-February when it will make a final decision on which firms have to comply with the new requirements.

Solving the teacher shortage: In a bid to plug the shortfall in teachers, the government will hire an additional 30k teachers annually for the next five years and up the amount it spends on bonuses for teachers to EGP 3.1 bn, Ittihadiya said. At the beginning of the current academic year the Education Ministry was forced to call on people to volunteer as teaching assistants. Education Minister Tarek Shawki said at the time that there is currently a 250k person shortfall in teachers.

And more money for higher-ed staff and students: The Sisi administration has earmarked EGP 1.5 bn in the budget for bonuses for academics and researchers, in addition to financing a new law on tenured professors’ salaries. Dentistry, physiotherapy and nursing students will also be included in a prior decision to hike medical students’ training salaries.

What’s next for the budget: The Finance Ministry plans to begin public consultations on the budget and the government’s strategic targets this month.

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