By John Ikani
The Egyptian government has announced measures to curb non-essential spending in an effort to alleviate pressure on the country’s currency and curb rising inflation.
On January 4, the government issued instructions to all ministries to cut spending until the end of the fiscal year in June.
The decision, which was published in the official gazette this week, includes the postponement of any new national projects that are heavily dependent on foreign currency.
Ministries are also required to seek approval from the finance ministry for any foreign currency expenditure.
The health, interior, foreign, and defence ministries, as well as agencies responsible for subsidizing food products and energy, are exempt from the spending cutbacks.
The move comes as Egypt continues to grapple with a foreign currency shortage, despite allowing the Egyptian pound to depreciate significantly in recent months.
It is worthwhile to note that the reversal of these curbs is one of the key requirements of a 46-month financial support package from the International Monetary Fund (IMF) confirmed in December, In addition to the greater exchange rate flexibility.
