New budget: Health, education spending less than half constitutionally required amount

Only around 1.16 percent of Egypt’s gross domestic product is to be allocated to government spending on health in the new general budget for fiscal year 2025/24 and 1.7 percent on education, according to the budget financial statement announced by the finance minister on Tuesday, of which Mada Masr obtained a copy.

The allocations, which are equivalent to LE200 billion and LE294 billion, respectively, both fall short of the required spending for these sectors laid out in the 2014 Constitution.

The 2014 Constitution mandates the government to allocate a minimum of six percent of GDP to its annual spending on education and higher education. Three percent of GDP is required for health spending.

Required minimum spending was due to be effective starting FY 2016/17. During that year, in an attempt to demonstrate its compliance, the Finance Ministry devised a new way of defining spending on health and education that was "broader and more comprehensive," according to a ministry source who previously spoke to Mada Masr.

The new definition includes spending by economic entities and by some state companies on both sectors, extending beyond budgetary entities directly responsible for spending on the sector. For health, this new definition incorporates spending not only by institutions under the Health Ministry, but also by "any other entities providing healthcare services such as police, military and Azhar hospitals, and the comprehensive health insurance and affiliated programs," the source said.

The following figure illustrates spending on health and education under both the operational concept, which is the primary concept on which the general budget is based, and the modified concept. It also shows that the allocations outlined in the budget do not align with the constitutional entitlement under either concept.

Most importantly, this definition, approved by parliament, also factors in annual budgetary allocations to paying interest on borrowing undertaken for the health and education sectors on the basis that these sectors benefit from the debts, said a senior source at the Finance Ministry.

In November 2021, the government’s new definition was formalized through amendments to the general finance law passed by Parliament.

Regardless, the government confirmed in the budget financial statement for FY 2024/25 its commitment to "meeting the constitutional requirement for health and education.” “Health allocations are set to increase to LE496 billion, a LE99 billion increase from FY 23/24, while education allocations will see an increase of LE267 billion to reach LE858 billion,” it said.

The percentage of spending on health and education as a share of GDP in the upcoming fiscal year also decreased in comparison to the current fiscal year’s budget, which will end June 30.