VZCZCXYZ0000
RR RUEHWEB

DE RUEHEG #2390 3631457
ZNR UUUUU ZZH
R 291457Z DEC 09
FM AMEMBASSY CAIRO
TO SECSTATE WASHDC 4586

UNCLAS CAIRO 002390 
 
SIPDIS 
SENSITIVE 
 
STATE FOR NEA/ELA and EEB/IFD/OMA Brianna Saunders 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN EAID PGOV EG
SUBJECT: Post Response to Questions on Egyptian Fiscal Transparency 
 
REF: E-mails J. Speaks-K. Allen 
 
¶1. (U) The following is post's response to request for information 
regarding Egypt's fiscal transparency: 
 
¶2.  (SBU) Answers to reftel questions: 
 
Q1: Is central government expected to receive funding under the FY 
2010 SFOAA ? 
 
A1: Yes. 
 
Q2: Is Egypt's annual national budget available? 
 
A2: Egypt's budget is made public.  It is discussed in the 
parliament and published in newspapers and online on the Ministry of 
Finance website (www.mof.gov.eg). The Ministry of Finance adopted an 
international system called GFS-2001 (Government Financial 
Statistics) prepared by the IMF Statistics Department. In line with 
this manual, the ministry produces a "fiscal statement" and a 
"statistical statement" for the state budget that is posted on its 
website. Defense and research and development budgets are not 
declared. 
 
Q3: Are incomes and expenditures included in the publicly-available 
budget? 
A3:  Some income and expenditure information is included in the 
Egyptian fiscal budget. Notably missing is data on presidential 
expenses, military income and expenditures, public enterprises, and 
the state-owned oil company. 
 
Under Egypt's current financial management framework, accountability 
and transparency are limited. Egypt has historically ranked poorly 
on various budget transparency indices, most recently in the 
International Budget Partnership's Open Budget Index report. While 
progress has been made in recent years, it still is difficult for 
average citizens to obtain timely information in an easily readable 
format about actual versus budgeted expenditures. Year-end reports 
are not made publicly available in a timely fashion. There is 
inadequate focus on policies, priorities and performance. 
 
Q4: Post's assessment of the extent to which the publicly-available 
budget accurately reflects actual government incomes and 
expenditures. 
A4:   There has been some improvement in the comprehensiveness of 
the budget, although there continue to be concerns over the accuracy 
of the data.  The historical sensitivity of the transparency issue 
and a lack of sound reporting practices may explain shortfalls in 
transparency. The Government has consolidated many government 
accounts into a Treasury Single Account (TSA), but many accounts 
have yet to be consolidated into the TSA. The military and security 
accounts were never envisioned to be included and it is unlikely 
that the oil and natural gas accounts will be included either. 
USAID has supported the Ministry of Finance in designing and 
procuring an information technology system for the new tax 
administration system, providing for information exchange with other 
government entities and web access, as well as increased 
transparency and control. The USAID program on budget management 
ended in 2008 after progress stalled.  The unified organic budget 
law, drafted in 2008 and which would have enhanced transparency, has 
yet to be passed. 
 
Q5: Have there been any events since the 2009 review that may have 
affected fiscal transparency? 
A5: Since the onset of the global financial crisis, the government 
has announced three economic stimulus packages totaling LE33 billion 
(US$6 billion). Though the government has made public some detail on 
planned expenditures under the stimulus packages, there has been no 
detail published on actual expenditures and the sources of the 
stimulus funds. 
 
¶2. (U) Post contacts for further information and/or follow-up data 
requests are Political-Economic Counselor Stephen O'Dowd 
(O'Dowdsp@state.gov) and Economic Officer John Speaks 
(speaksjt@state.gov). 
 
SCOBEY