Egypt Orders Ministries To Curb Spending

Egypt’s government has instructed ministries to cut non-essential spending until the end of the fiscal year in June.

This comes as the government tries to cope with continuing pressure on its currency and rising inflation.

The decision, dated January 4 and published in the official gazette this week, includes the postponement of any new national project heavily reliant on foreign currency and requires ministries to seek finance ministry approval on foreign currency expenditure.

The health, interior, foreign, and defence ministries are exempted, as well as agencies tasked with expenditure on subsidised food products and energy.

The move comes as Egypt has continued to face a foreign currency shortage despite allowing the Egyptian pound to depreciate sharply in recent months, most recently last week.

Meanwhile, the reversal of the curbs was a key requirement of a 46-month financial support package from the International Monetary Fund confirmed in December. Greater exchange rate flexibility was another condition of the IMF deal.

REUTERS/Christopher Ojilere