The budget of any state is generally defined as an approved detailed estimate of public revenue alongside public expenditure for a given fiscal year. This usually covers what is needed to achieve specific goals within the framework of the planned economic and social development of the state based on its general policy.
One of the basic principles of a budget is unity, with all public revenue and expenditure recorded in one document. While this is the norm, there are exceptions, with budgets attached to some government departments or public bodies that are given administrative and financial independence. However, such exceptions aside, during Abdel Fattah Al-Sisis presidency in Egypt, we find that there are several funds operating in parallel with the state budget, which has opened the way for corruption and a lack of accountability and transparency from a government with absolute control over everything.
Egypt continues to suffer from essentially private funds which take money from Egyptian citizens and distribute it without supervision or accountability. When Sisi came along he leaned towards this way of extracting money from the public by creating parallel budgets that are not related to the state budget, even though their resources are essentially state money.
READ: After losing jobs, many Sudanese struggle to make ends meet in Egypt
At the forefront of this process is the Viva Egypt Fund, which was initiated by Sisi on 24 June, 2014. He donated half of his salary to the fund as a PR stunt. Presidential order 139 of 2014 was issued decreeing its formation, then a new regulation, known as Law 84 of 2015, was issued regarding its establishment which revealed Sisis authoritarianism as he acted as if it was his personal fund. Article 2 of Law 84 of 2015 replaced order 139 and stipulated, The president of the republic will decree the method of supervising, managing and administering financial and administrative affairs of the fund, in accordance with the nature and activity of the fund to enable it to carry out its mission without restriction by the governmental regulations referenced in any other law.
Article 8 of Presidential order 139 of 2014 had stipulated that the resources of the Viva Egypt Fund are public funds subject to the provisions of the Penal Code, to be reviewed and audited by the Central Auditing Agency (CAA), with a quarterly report to be presented to the president. However, it was amended and replaced by Article 9 of Law 84 of 2015, which stipulated that annual and quarterly reports are prepared based on the standards of the CAA and reviewed by an accounting office selected by the funds board of trustees. The report is then submitted to the board of trustees who in turn present it to the president. The CAA prepares a performance indicators report annually, in the light of the financial statements approved by the auditor, and it is presented to the board of trustees, thus reducing the supervisory role of the Agency.
While the Viva Egypt Fund announced that it would work in health care, social support, urban development, economic empowerment, education and training support, and would be there in the event of disasters and crises and these are noble areas of operation the responsibility for them should fall on the state and be a part of its general budget. There is no need for a separate fund and flashy behaviour which opens the doors to underhand payments to businessmen and scaring investors away with the lack of transparency and integrity. The only key to the Viva Egypt Fund is in Sisis hands. Moreover, national economies are not usually based on the government begging for donations.
READ: Egypt pledges housing for every citizen in need
The biggest disaster is that Sisi is directing these often involuntary donations that he imposed on those guilty of construction violations to the Viva Egypt Fund. They are supposed to contribute towards the efforts to prevent the spread of Covid-19, and a draft law now stipulates a 1 per cent compulsory deduction from the net income of employees in the state and private sectors, except those on the very lowest of salaries. The Minister of Finance himself said that nothing from these employee deductions will go into the state treasury. Estimated at billions, the money is going to the Viva Egypt Fund instead, about which I have serious reservations.
The Viva Egypt Fund is not alone; Law No. 177 of 2018 created the Egypt Fund for the countrys sovereign wealth, with capital of 12.5 billion Egyptian pounds. The law gives Sisi the absolute right to transfer ownership of any of the untapped assets owned by the state, the fund or any of the other funds that he establishes, and gives him absolute powers to sell Egypts assets without any accountability. This is done by protecting the contracts made by the funds against legal appeals or from being contested by third parties.
Finance Minister Mohamed Maait recently announced a $125 million fund to ensure consumer financing and stimulate domestic consumption. According to him, the new fund will provide a guarantee for the authorities and companies that carry out consumer finance operations. This will motivate industrial, service, real estate and consumer finance companies to meet consumer needs for credit facilities and instalment plans. The fund will include several more specialised branches that will be paid for out of the public treasury. He did not specify the sectors in which these branches will be active. The minister added that the new fund would also provide low-cost financing for government initiatives, such as the project to convert cars to work on natural gas.
READ: Egypt man locks his sister in a room for 22 years
This fund achieves Sisis vision of not only shackling the state with debt to the tune of almost $376 billion, but also shackling the Egyptian people with personal debt and opening the way for promoting the products of businesses owned and operated by the armed forces, which basically control the economy in Egypt. He is also creating a market for Israeli gas by limiting the licensing of cars to those that can run on natural gas.
The running of the Egyptian government by these sort of funds will continue as long as absolute rule is the norm, and supervision, accountability, transparency and integrity are regarded as crimes. Egypt does not lack resources as much as it suffers from them being looted by the people who are supposed to be their guardians.
This article first appeared in Arabic inArabi21on 15 July 2020
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.
Read more:
The funds that govern Egypt - Middle East Monitor
- FMO & IMO | Financial Independence Group, Inc - December 25th, 2016 [December 25th, 2016]
- financial independence - Good Financial Cents - December 31st, 2016 [December 31st, 2016]
- 8 Secrets to Achieving Financial Independence - January 4th, 2017 [January 4th, 2017]
- COLUMN-Millennial parents still like to tap the Bank of Mom & Dad - Thomson Reuters Foundation - February 7th, 2017 [February 7th, 2017]
- Republicans Move on Financial Deregulation; Fed Finalizes Stress Test Guidance - Lexology (registration) - February 7th, 2017 [February 7th, 2017]
- Millennial parents still like to tap the Bank of Mom & Dad - One ... - One America News Network (press release) - February 7th, 2017 [February 7th, 2017]
- Speaking of Women...Are We Really More Financially Independent Now? - Investopedia - February 7th, 2017 [February 7th, 2017]
- House Dems: Trump wants to put Wall Street first - The Hill - February 7th, 2017 [February 7th, 2017]
- 3 insider tips for achieving financial independence | The Motley Fool ... - Motley Fool UK - February 7th, 2017 [February 7th, 2017]
- The power of financial independence - KXAN.com - February 7th, 2017 [February 7th, 2017]
- Find out if you qualify for free tax preparation and financial advice - wtvr.com - February 7th, 2017 [February 7th, 2017]
- My Turn: Program provides a path out of homelessness - AZCentral.com - February 7th, 2017 [February 7th, 2017]
- Getting To Know You Tuesday: Elliot Dole - Forbes - February 7th, 2017 [February 7th, 2017]
- Millennial Parents Still Like to Tap the Bank of Mom & Dad - WealthManagement.com - February 8th, 2017 [February 8th, 2017]
- How to Prioritize Financial Goals When You Can't Do It All - Inside Higher Ed (blog) - February 8th, 2017 [February 8th, 2017]
- How to Modify Money Management After the Presidential Election - Yahoo Finance - February 10th, 2017 [February 10th, 2017]
- Congress could limit the Fed's independence and hurt the US economy - Washington Post - February 13th, 2017 [February 13th, 2017]
- Court Rejects Order Forcing Parents to Pay Tuition - Inside Higher Ed - February 13th, 2017 [February 13th, 2017]
- Syrian refugee families achieve financial independence in Alliston - Simcoe.com - February 14th, 2017 [February 14th, 2017]
- Sheroes Founder Sairee Chahal ventures for Women's Financial Independence in India's sometimes Suffocating ... - Plunge Daily - February 16th, 2017 [February 16th, 2017]
- Advocates say more women need financial independence: 'We really do need that extra leg up' - Globalnews.ca - February 16th, 2017 [February 16th, 2017]
- Surviving widowhood: Five tips to avoid financial hardship - Cincinnati.com - February 16th, 2017 [February 16th, 2017]
- Q & A with Sr. Maureen Gallagher, setting up financial independence paths for women in Mexico - Global Sisters Report (blog) - February 16th, 2017 [February 16th, 2017]
- The road to financial freedom - ABS-CBN News - February 18th, 2017 [February 18th, 2017]
- Byron Moore: Position, Pace and Power perform like a pro - Monroe News Star - February 18th, 2017 [February 18th, 2017]
- Cash Course - Binghamton University Pipe Dream - February 20th, 2017 [February 20th, 2017]
- Independence Financial Partners - SPECIALIZING IN - February 20th, 2017 [February 20th, 2017]
- 'Financial you' hits all bases, aligns with priorities, values - Lehigh Valley Business - February 20th, 2017 [February 20th, 2017]
- International Financial Reporting Standards - Wikipedia - February 21st, 2017 [February 21st, 2017]
- Opinion: Young adults need an easier path to financial independence - LSU Now - February 23rd, 2017 [February 23rd, 2017]
- Retiring in their 30s. Yep, they're doing it. - Crain's Chicago Business - February 24th, 2017 [February 24th, 2017]
- Successful Boomer Women Offer Financial Advice to Younger ... - Fox Business - February 24th, 2017 [February 24th, 2017]
- 'Thousands' of cancer sufferers forced to borrow money from parents because of financial difficulties caused by illness - The Independent - February 27th, 2017 [February 27th, 2017]
- Independence Contract Drilling, Inc. Reports Financial Results For The Fourth Quarter And Year Ended December 31 ... - PR Newswire (press release) - February 28th, 2017 [February 28th, 2017]
- Another way to measure retirement readiness: Your 'Power Percentage' - USA TODAY - March 1st, 2017 [March 1st, 2017]
- Oran Hall | Young cop seeks financial independence | Business ... - Jamaica Gleaner - March 6th, 2017 [March 6th, 2017]
- International Women's Day - Investing for financial independence - Simple Landlords Insurance (press release) (blog) - March 8th, 2017 [March 8th, 2017]
- Game of Thrones gave financial independence to actor Conleth Hill - Bollywood Life - March 8th, 2017 [March 8th, 2017]
- How to Leverage Your Small Business for Financial Success - Kiplinger Personal Finance - March 9th, 2017 [March 9th, 2017]
- A Struggle Back to Financial Independence After a Brain Injury - The Good Men Project - March 9th, 2017 [March 9th, 2017]
- Ten favorite personal-finance books - Christian Science Monitor - March 11th, 2017 [March 11th, 2017]
- Five facts about financial independence - finder.com.au - April 8th, 2017 [April 8th, 2017]
- Regulatory reform leads to financial independence - Argus Leader - Sioux Falls Argus Leader - April 8th, 2017 [April 8th, 2017]
- Mayor Berke's Council For Women Takes On Predatory Lending - The Chattanoogan - June 6th, 2017 [June 6th, 2017]
- Mayor's Council For Women Invites Public To Financial Independence Hearing On Monday - The Chattanoogan - June 6th, 2017 [June 6th, 2017]
- How I Reached Financial Independence By Age 40 - The Dough Roller - June 6th, 2017 [June 6th, 2017]
- Berz: High-interest loans can hamper financial independence - Chattanooga Times Free Press - June 6th, 2017 [June 6th, 2017]
- Financial tips, resources for college grads - WTOP - June 6th, 2017 [June 6th, 2017]
- Public invited to hearing on financial independence, high-interest lending - Nooga.com - June 6th, 2017 [June 6th, 2017]
- Financial Independence | Tardus | Retire Early | Wealth - June 6th, 2017 [June 6th, 2017]
- How to become financially independent in 5 years - Jun. 6, 2017 - CNNMoney - June 7th, 2017 [June 7th, 2017]
- House Republicans Vote to Strip Away Post-Financial Crisis Safeguards - Roll Call - June 8th, 2017 [June 8th, 2017]
- Auditor Independence Definition from Financial Times Lexicon - June 8th, 2017 [June 8th, 2017]
- Top 5 tips to achieve financial independence | Mpumalanga News - Mpumalanga News - June 11th, 2017 [June 11th, 2017]
- Two 6% dividends to help you achieve financial independence ... - AOL UK - June 11th, 2017 [June 11th, 2017]
- Sun Life kicks off Financial Independence Month with beautifully crafted short films - ABS-CBN News - June 13th, 2017 [June 13th, 2017]
- How to become financially independent in 5 years - CNNMoney - June 13th, 2017 [June 13th, 2017]
- Achieve financial independence with stocks by following this one ... - AOL UK - June 17th, 2017 [June 17th, 2017]
- I'll pursue financial independence for judiciary - Akuffo - GhanaWeb - June 20th, 2017 [June 20th, 2017]
- Baker awarded Helping Hands grant - Columbia Daily Tribune - June 22nd, 2017 [June 22nd, 2017]
- Baker awarded Helping Hands grant - Devil's Lake Daily Journal - June 23rd, 2017 [June 23rd, 2017]
- Porter's Five Forces can help you achieve financial independence ... - AOL UK - June 24th, 2017 [June 24th, 2017]
- You can achieve financial independence easily by using buckets ... - AOL UK - June 24th, 2017 [June 24th, 2017]
- You can achieve financial independence easily by using buckets ... - Motley Fool UK - June 26th, 2017 [June 26th, 2017]
- Greater savings options for feds draw praise, while move to cut their retirement looms - Washington Post - June 26th, 2017 [June 26th, 2017]
- Alabama one of the least financially independent states in the country - Birmingham Business Journal - June 26th, 2017 [June 26th, 2017]
- JL Collins' Tips for Achieving Financial Independence - The Dough Roller - June 26th, 2017 [June 26th, 2017]
- 3 steps to become wealthier and more successful - Ladders - June 27th, 2017 [June 27th, 2017]
- These 5% dividend yields could help you win financial independence - AOL UK - June 30th, 2017 [June 30th, 2017]
- Celebrating Independence - Jewish Link of New Jersey - June 30th, 2017 [June 30th, 2017]
- The easy way to financial independence - AOL UK Money - AOL.co.uk - AOL UK - July 2nd, 2017 [July 2nd, 2017]
- 5 powerful steps towards financial independence and retiring early ... - AOL UK - July 3rd, 2017 [July 3rd, 2017]
- Independence Financial Group - July 3rd, 2017 [July 3rd, 2017]
- Gain Financial Independence Attend a FREE Educational Event - FOX31 Denver - July 14th, 2017 [July 14th, 2017]
- CNNMoney readers react: She retired at 28 with $2.25 million - Aug ... - CNNMoney - August 6th, 2017 [August 6th, 2017]
- How to retire early with financial independence in 3 steps - NBC2 News - August 6th, 2017 [August 6th, 2017]
- Could this miner help you secure financial independence faster than ... - AOL UK - August 24th, 2017 [August 24th, 2017]
- Solutions 4 Financial Independence: 8/22/17 - WDTV - August 24th, 2017 [August 24th, 2017]
- The 7 Stages of Financial Independence | Radical Personal ... - July 30th, 2018 [July 30th, 2018]
- Financial Independence - August 3rd, 2018 [August 3rd, 2018]