Govt’s ‘national economic narrative’ lays bare constitutional breaches in spending, signals continued limits to survey data

The Planning Ministry released on Sunday the National Narrative for Economic Development, a document first announced last week as the government’s program for economic reform. Presented as a comprehensive framework, the narrative seeks to align the work of the government with Egypt’s Vision 2030 in light of the accelerating regional and international shifts.

But upon leafing through the 700 pages spread across six chapters, the narrative reveals two paradoxes. First, the government has failed  — and expects to continue failing through 2030 —  to meet its constitutional spending obligations on health and education. Second, it maintains the government’s continued practice of withholding much of the data from its household income and expenditure surveys.

Since 2016, the government has leaned on an accounting method that is designed to circumvent constitutional benchmarks by redefining what counts as health and education spending. Yet the narrative’s chapter on “quantitative targets” shows that actual functional spending in both sectors continues to fall below mandated levels.

Egypt’s 2014 Constitution requires the state to allocate no less than 6 percent of GDP to education — 4 percent for pre-university and 2 percent for higher education — and 3 percent to health, starting with fiscal year 2016/17. 

But in that year, the government devised an accounting practice that inflated spending figures, counting interest payments on loans used for health and education projects toward sectoral allocations. It also folded in the budgets of institutions not part of the civilian health or education systems — such as military and police hospitals or Al-Azhar institutes — despite the state’s own functional definition limiting education to entities under the ministries of education and higher education, and health to those under the Health Ministry.

The analysis report for the 2025/26 draft budget showed that education spending as a share of GDP has fallen to its lowest point in a decade, with constitutional thresholds for both education and health still unmet. By Mada Masr’s calculations, the draft allocates LE315.1 billion to education — just 1.54 percent of GDP — and LE246.2 billion to health, or 1.21 percent. The Finance Ministry, however, applied its adjusted definitions, adding LE649.2 billion to education and LE427 billion to health, and then declared constitutional compliance.

But in the national narrative document, the government clearly bases its calculations of health and education spending in past years as a share of GDP on the functional definition — which matches Mada Masr’s own analysis of previous budgets.

What stands out, however, is that the document explicitly notes that the projected spending percentages for 2030 — which still fall short of the constitutional thresholds — include “all current and investment expenditures of the competent agencies, in addition to interest payments.” In other words, the figures are representative of the government’s broadened accounting method and revised definitions, meaning that actual functional spending will be even lower than the published ratios suggest.

Under all three scenarios outlined in the narrative — conservative, baseline and reformist — allocations for health and education services will remain below constitutional requirements, as shown in the following chart drawn from the narrative’s chapter on quantitative targets.

According to the document, the “baseline scenario” represents Egypt’s current trajectory, assuming a continuation of existing policies and only gradual reforms. By 2030, this path would yield GDP growth of around 6 percent and raise the employment rate to 52 percent of the working-age population, without bringing about a qualitative shift in the structure or productivity of the economy.

The “reformist scenario” envisions an accelerated path driven by a package of structural and sectoral reforms aimed at boosting investment, productivity, private-sector participation, exports and non-oil manufacturing. Under this scenario, GDP growth would reach 7 percent by 2030, with an employment rate of 53 percent. 

By contrast, the “conservative scenario” assumes rising global geopolitical and trade risks, which would weigh down on the Suez Canal, the balance of payments and energy revenues, while driving up production costs. In this case, sustaining more than 4 percent growth annually over the medium term would prove difficult.

Beyond its chapter on quantitative targets, the document contains five other chapters: macroeconomic stability, foreign direct investment, industrial development and foreign trade, labor market efficiency and flexibility, and regional planning for localized economic development.

What stands out in the macroeconomic stability chapter is a promise to complete the “upcoming” household income and expenditure survey and make results available to “relevant government agencies and designated international partner institutions.” The language signals a repeat of what happened with the 2021-2022 survey: full results, including national poverty and extreme poverty rates, kept inaccessible to the public, with only partial raw data released on request through the Central Agency for Public Mobilization and Statistics (CAPMAS).

The chapter refers to launching “preparatory work” for the upcoming survey, without clarifying whether this refers to the 2023-2024 survey — which a senior official at CAPMAS told Mada Masr has already been completed on schedule — or to the one that follows.

The government, meanwhile, stressed its commitment to expanding public dialogue around the narrative. According to a Planning Ministry statement, the coming months will feature forums and discussion sessions involving researchers, academics and economists. Planning Minister Rania al-Mashat urged stakeholders and specialists to take part and engage constructively.

The hopeful outlook comes up against a series of negative economic indicators. The state’s allocations for debt service in the current fiscal year’s 2025/26 budget saw a steep rise, jumping to 65 percent of total expenditures. The IMF-led reform program has seen little progress, as a delegation from the monetary fund noted last week, pointing to a lack of divestment from its sizable ownership of state and military-owned entities. All of this sits beside continued uncertainty in the value of the pound which continues to fluctuate against the dollar, after having already lost 50 percent of its value in 2023 before the government’s decision to float the currency last year.