Governorates’ share in budget expenditure only 10%

Expenditure in Egyptian government’s budget is usually divided into three main components: the administrative apparatus consisting of thirty-four ministries and sovereign bodies; the ministries’ service bodies, estimated at about 161 bodies; and the local administration consisting of offices of all the twenty-seven governorates and the governorates’ service directorates (11).

In the budget of the current fiscal year 2020/2021, the expenditures reached 1 trillion and 713 billion Egyptian pounds, where the administrative apparatus got EGP1 trillion and 327 billion, 77.4% of expenditures; the service bodies received EGP215 billion, 12.5%, and the local administration got about EGP172 billion,  that is only 10% of expenditures, which is reflected in the continued decline in the condition of the various services, including education, health, and facilities in provinces.

The picture gets darker when we look at the wages of employees in various governorates, whether in the offices of governorates or in the services directorates therein, as they acquire 75% of the localities’ allocations in the budget, while investments targeting improvement of public services such as education, health and facilities, represent less than 13% of these allocations.

In addition, 10% of the local allocations go for the purchase of goods and services for running the daily work cycle in the offices of all governorates and services directorates, including writing tools, publications, fuel, transportation, water, electricity, maintenance, and so on.

The high share of wages in the local administration budgets is due to the high number of employees therein compared to the rest of the government budget components, where 2.821 million people work in the localities compared to 1.323 million people in the state’s administrative apparatus, and 538 thousand people in service agencies, according to the latest available data on government employment, released by the Central Agency for Public Mobilization and Statistics (CAPMAS) in June 2017, taking into mind that these figures have certainly changed in light of the International Monetary Fund terms related to the $12b loan to Egypt in November 2016, including reduction of the government’s civil servants.

Thus, it can be explicitly stated that the governorates’ budgets are wage budgets for government employees, in addition to purchase of their daily government work cycle requirements. As for the development of provinces through provision of necessary expenditures, it is still a postponed issue, and it is difficult to predict when it may be taken into consideration, due to the government’s lack of interest and its focus on developments in the new Administrative Capital, the new Alamein City and the like, and also due to the chronic and increasing budget deficit, which usually leads to a reduction in the allocations for investments upon implementation of the budget on the ground, as happened in recent financial years.

The available data of the budget’s final account of local administration in FY2019/2020 indicates that investment allocations were reduced by 12.4%, a reduction that affected the rest of expense chapters, albeit by lower rates, amounting to 6.5% in purchase of goods and services, and 5% in subsidies, where the total reduction rate in the Local administration expenses reached 3.5%.

Distribution of local administration allocations to governorates offices and service directorates – EGP 1 billion–

Spending ChapterTotal Local Admin.Local Admin. Spending DistributionTotal State BudgetLocal Admin. Share of Budget %
Purchase of Goods & Services17.53710.2100.20017.5
Other Expenses1.9441.1105.0001.9
Total Expenses171.64899.81713.17810
Possession of Financial Assets28.750
Loan Repayment0.2620.2555.5690.05
Total uses171.9101002297.4977.5

Source: Ministry of Finance data – Numbers rounded to the nearest EGP million

The above table shows how big the localities’ wages share is related to the total government budget wages, by about 39%. Nevertheless, localities’ wages are less than the relative share of 48.4% for employees in the administrative apparatus in ministries, despite the fact that the number of employees in the localities according to June 2017 data represents 2.1 double the number of employees in the administrative apparatus, due to the low average wage per capita of employees in local councils compared to their counterparts in the administrative apparatus, especially in some ministries such as petroleum, electricity and others.

Even the relative share of localities in terms of purchases and services, amounting to 17.5% of the total public budget’s expenditures, is much less than what the government apparatus’ share, amounting to 61% of the total allocation, and less than the 21% obtained by service bodies.

This was the same in the government budget’s investments section, where the localities received less than 8% of the allocation, compared to about 47% for service bodies and 46% for the administrative apparatus.

Budgets of governorates’ services directorates:

With respect to the share of governorates’ offices and governorates’ services directorates from the local administration allocations, the eleven services directorates in governorates have acquired 76% of the total expenditures allocated to the local administration, compared to 24% for the offices of all governorates.

Within the framework of the services directorates, the share of education directorates in governorates is 67% of the allocations for service directorates, followed by health directorates by 23%. This is due to the large number of employees in education and health directorates compared to other directorates.

Distribution of the budget of the local administration to governorates offices and services directorates – one billion pounds –

BodyWagesPurchase of Goods & ServicesInterestSubsidiesOther ExpensesInvestmentsTotal Spending
Total Local Admin.129.50617.5370.3290.5941.94421.741171.648
Governorates’ Offices12.4397.7730.3290.2271.33219.41941.519
Services Directorates117.0659.7640.3670.6122.322130.130
Education Directorate79.8834.8950.0660.2202.00087.064
Health Directorate25.5354.2910.0200.35130.198
Agriculture Directorate3.3760.0830.0050.0013.465
Youth & Sports Directorate2.4000.0630.1250.000.40.1002.688
Social Solidarity Directorate1.8990.0670.1420.000.30.1332.241
Supply Directorate1.1720.0400.0020.0040.0401.258
Veterinary Directorate1.1780.0540.0030.0211.256
Roads & Transportation Directorate0.5070.1970.0010.0130.718
Manpower Directorate0.4760.0370.0010.000.20.550
Housing Directorate0.4590.0260.0010.000.30.487
Organization & Administration Directorate0.1800.0110.

Source: Ministry of Finance data – Numbers rounded to the nearest EGP million

The above table indicates that the wages section has acquired the largest share of the local administration budgets, whether in governorates’ offices or in services directorates, followed by allocations for the purchase of goods and services to provide the daily government work requirements at these bodies, including writing tools, publications, fuel, transportation, maintenance, and so on. This means that a smaller share remains for investments and a very low share for subsidies.

Budgets per capita in governorates:

It is necessary to find out how far the budget spending is consistent with the population of different governorates, and whether these allocations are related to number of residents only or they are related to poverty and unemployment rates in various governorates.

Distribution of local administration budget uses to governorates – EGP 1billion–

GovernorateUsesUses RankingPopulationPopulation RankingPer Capita Share
Port Said2,962220,774223,827
Kafr El-Sheikh6,535143,553141,839
Beni Suef5,131163,377161,519
Red Sea2,245250,382255,876
North Sinai3,059210,451246,783
South Sinai1,383270,1092712,688
New Valley2,378240,254269,362

Source: Ministry of Finance data – numbers are rounded to the nearest whole number.

The above table indicates the inconsistency of governorates population with the uses allocations for each.

With regard to the per capita spending, South Sinai governorate topped with a share of EGP12,688, followed by the New Valley Governorate EGP9,362, North Sinai Governorate EGP6,783, Red Sea Governorate EGP5,876, and Matrouh Governorate EGP5,016, all of which are border governorates. This may be due to the increase in costs of projects therein due to the added cost of transporting building materials and supplies, as well as the higher wages compared to other governorates, due to additional bonuses for working in those border governorates.

Wages in governorates budgets:

The total figure of uses is not sufficient to demonstrate the distinction of the share of some governorates, as those uses are divided into six main chapters including: wages, the purchase of goods and services to manage the daily government work cycle in government departments, the debt interest, subsidies, investments, and other expenditures, where the share of wages tops at the expense of the rest of spending aspects, most importantly investments that are directed for roads, infrastructure, housing, health and educational facilities, etc.

Distribution of wage allocations to governorates – EGP 1billion –

GovernorateUsesWagesWages RankingWages Rate to Uses
Port Said2.9621.5782353.4
Kafr El-Sheikh6.5355.3081381.2
Beni Suef5.1313.9571577.1
Red Sea2.2451.0292645.8
North Sinai3.0592.3702077.5
South Sinai1.3830.7322752.9
The New Valley2.3781.5792266.4

Source: Ministry of Finance data – with numbers rounded to the nearest million pounds.

It is natural for wage allocations to each governorate to be related to the number of government employees, where Sharqia governorate, the third in population, comes on top of the list, followed by the Dakahlia governorate, the fourth in population, then comes Cairo in the third place despite It is the first with respect to population, and so on.

This can be explained by the fact that citizens in provinces prefer government work due to job stability, health insurance, social services, and others, in addition to the lack of job opportunities in private sector companies.

Share of investments in governorates’ spending:

While wages accounted for 75.3% of the total uses of the local administration, the proportionate share of investments reached 12.6%, a value of EGP21.7 billion. Distributing these investments to 27 governorate offices and 297 services directorates in the governorates, i.e. 324 governmental administrative bodies, it is clear that the relative share of governorates offices and services directorates is low.

Distribution of investment allocations to governorates – EGP 1billion–

GovernorateinvestmentsInvestments RankingPer Capita InvestmentsRanking of Per Capita Investments
Port Said995512864
Kafr El-Sheikh6171717415
Beni Suef6511816913
Red Sea6463169114
North Sinai347676925
South Sinai3571327524
New Valley3444135426

Source: Ministry of Finance data – Numbers rounded to the nearest million pounds.

The criterion of ranking governorates in terms of the value of investments allocated to them is not sufficiently expressive of the impact of these investments in each, given the difference in the number of population, and it is natural that the value of investments is related to the number of the population, therefore, the per capita share of investments allocated to the governorate was used to indicate the impact of these investment allocations on each.

Distribution of subsidy allocations to governorates – EGP 1million –

GovernorateSubsidiesRanking SubsidiesRanking Subsidies to Population
Port Said9.22521
Kafr El-Sheikh25.3714
Beni Suef22.31116
Red Sea12.62025
North Sinai22.41024
South Sinai20.31327
New Valley11.32326

Source: Ministry of Finance data – Numbers rounded to the nearest million pounds.

The above table shows the low share of the local administration in the subsidy allocations, which is clearly visible in governorates such as Suez, Port Said, Ismailia, New Valley, Qena and Fayoum, although they are distributed among the governorate’s general office and 11 service directories in each governorate.


If there is a clear complaint about the low share of the local administration from the government budget allocations, and another complaint about the acquisition of wages and the purchase of goods and services for government-affiliated entities on the largest share of those allocations, then the third problem is the failure to implement those allocations announced by the budget when it was approved, according to the final account data for the FY2019/2020 budget.

The problem of non-fulfillment of the local administration allocations announced at the beginning of the current fiscal year is due to several factors, most notably the emergence of the second wave of the COVID-19 pandemic consequences, with its due additional expenditures and the Prime Minister’s Decree No. 1763 on reducing budget spending, in addition to increasing internal and external government borrowing, where its cost, including interest and premiums, is given first priority with respect to the budget spending at the expense of investments and other areas of spending, whether allocated to the local administration or to other government entities.

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