Public Finance Management in Egypt: Opportunities and Challenges
The Egyptian economy faced grave challenges in the past three years that coincided with political transition and the accompanying social and security hardships. These challenges extended also to the public finance management, which used to suffer from several structural problems before 2011.
This paper focuses on analyzing policies that should be adopted by the Egyptian government to maximize opportunities and turn challenges related to public finance into opportunities through which the government can improve the efficiency of the public finance management.
First: Elements of Strength in the Current Landscape
There are several elements of strength in Egypt’s public finance management sector. This is evident in the following points:
- The government is trying to complete the project to develop the public finance system in cooperation with the World Bank, the Middle East Regional Technical Assistance Center (METAC) of the International Monetary Fund (IMF) and the EU. As part of the Egyptian government’s efforts to establish a regulatory and legislative foundation to combat administrative and financial corruption, the three parties will help Cairo to develop a strategy for public finance in line with systems and measures applied in major countries of the world,
- In the early days of 2015, the Egyptian ministry of finance started to lay down a framework for applying the internal audit system in public administration due to its important role in improving the efficiency of public administration, decreasing errors as a result of the weak state regulatory system and improving effectiveness of public expenditures in the administrative system,
- Two accountancy units in the state administration were chosen as models to apply the internal audit approach. The ministry of finance is currently carrying out an accurate analysis of the existing regulatory system to verify the efficiency of distributing financial controllers in the ministry over administrative units, measure the impact of the automation of public finance management on the financial control system, the role of the financial controller, financial inspection, review the structure of all units concerned with budgets and accounting in the administrative apparatus all over the country, as well as review regulations and laws that govern various tools of financial control to incorporate the internal audit system,
- A serious dialogue has been launched between the EU and Egypt’s ministry of finance on how to reform public finance management in the country, because the EU is implementing a series of programs to support the budget in sectors of vital interest to the government, such as education, health and transportation. The EU, however, has frozen any money related to support the budget due to the incomplete reforms in the public finance system in Egypt, as well as the problem related to macro-economic stability.
Image Source: Reuters Pictures
Image Source: Reuters Pictures