Budgeting in Egypt

Annex A. Assessment and recommendations relative to the OECD Spending Better Framework

Table ‎A.1. Egypt and the OECD Spending Better Framework

Spending Better principle	Assessment	Emerging recommendations	Stage of the budget cycle
1. Set Clear Fiscal Objectives	There is Cabinet level endorsement of medium-term fiscal objectives. An annual General Government debt ceiling exists. The MTBF is produced annually to guide fiscal policy and ceilings although it is not legally binding. Fiscal discipline and achieving fiscal targets have been strengthened since 2018 although there is no formal requirement for corrective measures if targets are missed. A FSP was prepared internally and used for FY2025/26 budget preparation and was published in December 2025. The macro-fiscal model is being updated to strengthen sectoral linkages and enable scenario analysis capabilities.	1. Publish a Fiscal Strategy Paper at the start of each budget cycle.	Budget Planning
2. Objective Economic Assumptions	A Technical Coordination Committee between MoF, MOPEDIC, the Ministry of Investment and Foreign Trade and CBE was established to facilitate the alignment on the macroeconomic framework. IMF negotiations validate the macroeconomic framework but otherwise there is no external validation or publication of forecasting methodology. The Budget Circular does not include all macroeconomic assumptions, which are communicated verbally to spending agencies. The MoF has established a fiscal risks management function. There is qualitative discussion of risks and increasing quantification of some macroeconomic risks in the Budget statement.	2. Publish a comprehensive summary of key underlying (non-sensitive) macroeconomic and fiscal assumptions, including a more comprehensive sensitivity analysis, for the annual budget and medium-term framework.	Budget Planning
3. Multi- year Expenditure Baselines	There is a strong legal foundation for the MTBF and medium-term planning. The MTBF structure, scope and coverage as established in legislation align with OECD good practices. MTBF General Guidelines and capacity building workshops have helped line ministries to understand the medium-term approach. A baseline no-policy-change scenario is not produced. Both medium-term planning and budget preparation are anchored by Egypt Vision 2030, the Government Programme and other strategic planning documents. The publication of the National Narrative for Economic Development represents a strong step toward articulating a coherent, government-wide vision for medium-term reform and growth, providing strategic context for budget preparation and fiscal policy discussions. Sectoral plans derive from the Medium-Term Strategy for Economic and Social Development (MTSESD) but are neither aligned vertically or horizontally and the MTSESD was not published in FY2025/26.	3. Develop a methodology to facilitate the calculation of a baseline expenditure scenario, that incorporates the impact of macroeconomic and demographic changes and the full year costs of recently introduced existing policies. 4. Ensure the timely preparation of the MTSESD and link it to budget submissions. 5. Strengthen alignment between sectoral plans and the MTSESD by issuing guidance for both vertical (within sectors) and horizontal (across sectors) coherence.	Budget Planning
4. Top-down ceilings	Multi-year aggregate ceilings are provided in the MTBF, reflecting macro-fiscal projections. However, line ministries are not yet provided with indicative top-down ceilings to inform their medium-term expenditure estimates. Nevertheless, for FY 2026/27 the authorities plan to disaggregate ceilings by organisational level to improve fiscal discipline. The new organisational structure in the MoF facilitates the future establishment of sectoral and organisational ceilings. There is a contingency reserve for unforeseen events, which is limited to 5% for each economic chapter. The Cabinet annually approves the criteria for its use. Reallocations are allowed within the same economic chapter, and within specific thresholds. All reallocations are automated and traceable on the GFMIS.	6. MoF should ensure the timely issuance of multi-year sectoral ceilings in the budget circular to anchor planning and constrain overly ambitious budget requests. 7. To enhance the provisions for budget execution flexibility, activate the carry-forward provision recognised in the Executive Regulations, with clear rules and safeguards to avoid misuse.	Budget Planning
5. Regular Spending Reviews	Spending reviews in Health, Education and Social Protection were piloted in FY 2020/2021 and updated in FY 2024/2025. However, spending reviews are not yet integrated into the budget calendar and are not linked to reallocation or reprioritisation.	8. Institutionalise spending reviews within the annual budget calendar as a tool for expenditure reallocation and efficiency, starting with sectors of high fiscal impact and leveraging PPB data to guide review selection	Budget Preparation
6. Informed Spending Decision	Substantial preparatory work has been completed for introducing PPB with effect from FY 2027/28, which will integrate performance information into the budget process. Programme structures have been updated and are being agreed with line ministries, and anchored in national strategies. Early performance indicators have been piloted; a procedural manual is published; and workshops are being delivered. Programme budgets are published on the MoF website although they are separate from the Budget Statement. For capital expenditure, in 2024 the Government established a ceiling on public investments reinforcing expenditure discipline. MOPEDIC has introduced procedures to ensure strategic discipline in public investment planning. There is no formal mandate or institutional framework for systematic policy evaluation.	9. MoF to finalise the PPB roadmap/action plan for implementation of PPB by completing remaining details in co-ordination with MOPEDIC. 10. Strengthen the PPB operational capacities of line ministry finance and strategic planning departments, and ensure effective co-ordination with the MoF and the MOPEDIC. 11. Strengthen costing methodologies and provide practical tools for ministries to link budget requests to strategic objectives and measurable results. 12. Establish a central policy evaluation function to validate performance indicators, monitor results sand support evidence-based budgeting decisions. 13. Enhance capital budgeting by strengthening project appraisal standards, improving the linkages between planning and financing systems, and operationalising the National Single Project Pipeline.	Budget Preparation
7. Consider All Forms of Expenditures	Legislation has been introduced to expand the definition of general government, enhancing fiscal coverage and accountability. The TSA now includes Economic Authorities so it incorporates near-complete coverage of government entities. The authorities are working to ensure compliance of general government consolidation with the GFS Manual 2014. New procedures have been introduced to restrict the number of special accounts. The Budget Statement includes an annual fiscal risk report, which covers contingent liabilities. The government has capped the value of sovereign guarantees (SG) and the MoF has established a “Guarantee Account” that records all SG related cash flows so they can be monitored. However, the SG ceilings are non-binding and subject to frequent revision. Neither is there a formal classification system for SGs, limiting the ability to assess the portfolio in a structured and risk-based manner. The MoF is drafting a SG Policy Manual to consolidate rules, processes, and roles in one document.	14. MoF to continue the enhancement of fiscal risk management by: collecting fiscal risks data from other stakeholders, including QFAs and off-budget entities, and to maintain a fiscal risk register. Consolidating the regulatory framework for SGs.	Budget Planning
8. Line Ministries as partners	Line ministry finance units (for current spending) and strategic planning units (for capital spending) are the main counterparts to MoF and MOPEDIC in preparing, monitoring, and executing the budget. The strategic planning units co-ordinate internal alignment between budget submissions and national/sectoral strategies. The MoF is working with the line ministry finance and planning units to raise awareness and build capacity under the PPB and MTBF reforms. However, the role and capacity of the finance function remains uneven across ministries. Apart from the monthly projected disbursement schedule, in-year budget monitoring between MoF and line ministries is largely ad hoc and there is no structure to enable emerging budget execution challenges to be identified in advance. Recent legislation empowers line ministries to reallocate within a defined framework but this is not yet implemented in practice.	15. Establish a regular communication framework (beyond the GFMIS and the monthly disbursement schedule) between the MoF, MOPEDIC, line ministries and local government, to build trust and co-operation so that emerging budget challenges are addressed in a timely manner, duplicative resource requests are avoided, and sectoral coherence is improved. 16. Implement limited in-year flexibility for line ministries within legally defined thresholds, to allow better operational management while preserving control. 17. Develop the IA function in public entities, in accordance with Prime Ministerial Decree 1146/2018.	Budget execution, control and reporting
9. Budget Transparency	The number of budget documents published by the MoF is being expanded and they are generally published on time, with occasional delays. The budget portal (www.budget.gov.eg) is being upgraded with innovative tools to enhance transparency and broaden public engagement. Fiscal risk reporting has been included in the Budget Statement since FY 2017/2018, with more details being included in the Budget Statement for FY 2025/26 but there is scope to improve risk quantification and scenario analysis. The availability of performance information in FY2027/28 will further facilitate citizen understanding and participation. While key reports (including the Budget Statement) are published in the limited PDF format, the MoF is enhancing public understanding, facilitating broader public access and analysis, and encouraging public engagement by publishing reports in open, user-friendly excel formats on its website, and by disseminating the Citizen Budget, Transparency Briefs, infographics, and simplified summaries through social media and public outreach, including schools. However there is no legal basis for some of this information which means they depend on the administrative discretion of officials. The authorities have actively promoted participatory budgeting practices at Governorate level, through school outreach, focus groups and public hearings. The Open Budget Survey ranks Egypt at 8th globally and 1st in the MENA region for public participation.	18. Fully deploy the DMFAS. 19. Ensure that all information published in the Financial Monthly Report is timely and compare revenue and expenditure at the end of each month against the original planned profile. 20. Expand the use of open, machine-readable formats for core budget documents and ensure timely publication of all documents to support public debate and policy analysis, by anchoring this in law, if necessary. 21. Enhance the Mid-Year Review by providing clearer analysis of in-year budget execution and a forward-looking assessment that will support budget planning.	Budget execution, control and reporting Budget Oversight and Transparency
10. Budget Oversight	Parliament formally approves the state budget and has sufficient time to debate it. It holds post-budget hearings on final accounts and audit findings, through the parliamentary committee system. It publicises ASA findings and recommendations through press releases within the constraints of data confidentiality requirements. The timeliness of ASA audit reports being published on the Parliament website has improved although they are still being published after the legal deadlines. There have been recent initiatives by Parliament to enhance budget oversight during budget execution through the committees and field visits to governorates to oversee projects and hear citizen concerns. There is no evidence to suggest Parliament tracks the implementation of ASA recommendations although ASA reports on the implementation status of recommendations in follow-up reports. The ASA, as the institution responsible for external oversight of public entities, issues an audit of the final accounts and individual audit reports, which includes assessments of final accounts and programme execution. ASA performance audit reports are not linked to the performance information provided by the line ministries in the context of PPB yet. The ASA does not publish information on the implementation status of its audit recommendations.	22. Formalise mechanisms for parliamentary tracking of ASA audit recommendations, including public reporting on follow-up actions taken by the executive. 23. Institutionalise regular and timely parliamentary hearings on the ASA’s audit recommendations to improve budget implementation. 24. Establish an independent Parliamentary Budget Office to enhance Parliament’s analytical capacity on budgeting.	Budget Oversight and Transparency