Egypt - Prime Minister Mostafa Madbouly published a decision on the Official Gazette on Monday to task the Ministry of Finance with management and follow-up on all existing initiatives that have a low return on market prices instead of the Central Bank of Egypt (CBE).
This decision was widely expected after Governor of the CBE Hassan Abdalla said during the last economic conference that “the main task of the Monetary Policy Committee of the Central Bank is to confront and control inflation, not initiatives.”
The initiatives included in the decision included the real estate financing initiatives for low- and middle-income people, the initiative to support tourism, the initiative to replace old vehicles, as well as the modern irrigation initiative. However, the decision did not address the two initiatives to support the private sector and industry and small and medium enterprises.
According to the Official Gazette, this includes the decision-making process and the identification of controls related to those initiatives in terms of identifying the beneficiaries, the costs, the time period, the entity that will undertake the executive management of each initiative, the source of funding for the initiative, and the entity that will bear the cost, so that the cost and resources for financing these initiatives are reflected within items of the general budget after the approval of the Cabinet based on the proposal of the Minister of Finance.
The concerned authorities shall ensure that there is sufficient balance in their account with the CBE to finance the cost of the initiative. In the event that the concerned authorities are unable to bear the cost of the initiative affiliated with it, the Minister of Finance — in conjunction with the relevant minister —shall submit to the Cabinet a mechanism for managing the required funding and taking the necessary corrective decisions at least one month before the due date of the next compensation amount.
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