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Monday, 16 May 2022

Breaking down the government’s education spending plans in FY 2022-2023

Breaking down the government’s education plans + expenditure in FY2022-2023: Last week, Planning Minister Hala El Said laid out the government’s sustainable development plan for FY2022-2023 (pdf) in an address to the House of Representatives, while Cabinet presented its revised draft budget (pdf and pdf) for the upcoming fiscal year. Education accounts for 26.8% of the nearly 2.1 tn planned for spending next year, with some EGP 555.6 mn earmarked for investments and expenditure in education, higher education, and academic research — up nearly 22.8% from the current fiscal year. Whereas the FY2021-2022 investment budget was marked by a push for tech universities, this year sees the government putting more focus on plugging teacher and classroom shortages and developing school infrastructure.

Remember: This is a crisis budget: Prime Minister Moustafa Madbouly had directed the Finance Ministry in March to “reassess priorities” for the FY 2022-2023 budget as rising global commodity prices on the back of the war in Ukraine began to do economic damage. The war also threatens a key hard currency earner: Prior to the invasion, Russian and Ukrainians together accounted for nearly a third of our inbound tourism market.

The big-picture breakdown: K12 education gets EGP 317 bn of the total budget allocation for education, which is equivalent to 15.3% of the entire budget. Higher education gets EGP 159.2 bn — around 7.7% of the state’s total spending — while EGP 79.3 bn is dedicated to scientific research, accounting for almost 4% of the entire budget, and marking a c.24% y-o-y increase from the current fiscal year.

The boost in scientific research is notable: A big hindrance for our research landscape has been a lack of funding, as we’ve reported earlier this year. Next year’s boost could mean more potential for the country’s academic researchers to shine, and higher global rankings for our universities.

A portion of the investment in K12 education is dedicated towards affordable schooling: Some EGP 5.2 bn are earmarked for schools targeting the middle-income segment. Those include Japanese schools, Nile Egyptian Schools, STEM Schools, and 20 new applied technology schools. The common denominator between the three categories? The target market is the middle-income segment, and the goal is to alleviate the pressure on families resulting from rising global prices and inflation — which reached near a three-year high in April — as well as building skill sets that meet the labor market’s needs.

Another goes towards plugging shortages, starting with classrooms…: Some EGP 4.5 bn are earmarked for building 25k classrooms, up 40% from the investments earmarked for classrooms in the current fiscal year. Education Minister Tarek Shawki has said that Egypt’s classroom shortage currently stands at over 300k classrooms across the country. The average number of students in each classroom is 49, according to statistics (pdf) published by the Education Ministry in the last academic year.

…and teachers: Another EGP 1.8 bn will go towards plugging the teacher shortage, with a plan to hire some 30k teachers over the next fiscal year. Government schools have been facing a substantial shortage of teachers, which Shawki has put at as many as 250k. In a bid to plug the shortfall, the government will hire an additional 30k teachers annually for the next five years.

REFRESHER- Why is there a shortage in the first place? Egypt’s K-12 teachers generally face a host of challenges, including (pdf) low salaries and a lack of necessary qualifications. Teacher training is especially challenging, as the education system often values academic prestige over the practical skills that would help teachers become better educators.

One of these issues is addressed in next year’s budget: The budget ups the allocation for wages of education and health workers by EGP 43 bn compared to the current fiscal year, with EGP 127.7 bn earmarked for wages, bonuses and compensation for workers. This comes as the government decided to increase the monthly minimum wage for state employees across all salary bands by EGP 300, bringing the public-sector overall minimum wage to EGP 2.7k as of 1 July. The new minimum wage hike came as part of a basket of measures announced in January to give incentives to public workers, including extending annual 7% bonuses first brought in last year, and hikes to pensions.

School infrastructure improvements also got a boost in the budget: Some EGP 324 mn is earmarked for expanding smart classrooms and providing smart boards to schools, with another equal amount earmarked for classrooms in applied tech schools. Another EGP 700 mn has been earmarked for the ongoing implementation of Education 2.0, a sweeping reform announced in 2018 that is set to cost some USD 2 bn and should be fully implemented by 2030, in line with the government’s broader development plan, Egypt Vision 2030. Meanwhile, procuring services and consumables for education will cost the government EGP 15.8 bn.

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