Results-oriented budgeting in Egypt

3.0 SETTING THE STAGE FOR RESULTS-ORIENTED BUDGETING IN EGYPT 
Budget
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is a key instrument that enables government to provide its people with services that the private sector 
does not provide (public goods) or does not provide in satisfactory amounts (merit goods). The provision of an 
enabling environment for the operation of the private sector, as well as the reduction and alleviation of poverty 
was the major objective of expenditure policies expressed o
ver the years in the GOE’s official announcements. 
It is therefore vital that the budgetary process be geared towards effective and efficient delivery of services.
The key players in the budgetary process include: (i) the Parliament (People’s Assembly); (iii) the Consultative 
Assembly (Shoura Council);
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(iv) the President, who issues the statement of economic, political and social 
policy priorities of the country in a given year; (v) the Cabinet of Ministers, in charge of overall economic 
development and the setting of sector priorities and the accompanying budget allocation; (vi) Ministry of 
Economic Development (MOED),
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which prepares the investment budget; (vii) the MOF;
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and (viii) the line 
ministries, which are responsible for implementing sector policies based on the resources allocated to them. 
At that time, the budget process seemed to create obstacles that inhibited the changes desired by the GOE to 
introduce performance. The budgeting process focused excessively on managing financial flows (i.e. inputs), 
rather than on attempting to build a process which ensures the adoption of expenditure patterns that implement 

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Interdisciplinary Journal of Research in Business ISSN: 2046-7141
Vol. 2, Issue. 9, (pp.13- 25)
|
2013
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government
’s
policies or on achieving the best possible results within the budget allocation (i.e. results and 
outcomes). Specifically, the budget process as it stood did not: (i) prioritize expenditures; (ii) achieve service 
delivery cost savings; (iii) utilize a comprehensive approach; and (iv) focus on results orientation.
In early 2000, the GOE requested the World Bank to review the budget process in light of the identified 
obstacles. In the course of a full year, the World Bank had generated an Egyptian Economic and Social Review 
(ESSR) that was published on 20 June, 2001. The comprehensive document mentioned the key challenges faced 
by the Egyptian economy and society up to the time of writing. The pivotal areas of ESSR were (i) 
macroeconomic development and growth; (ii) global integration opportunities; (iii) employment and welfare 
developments; and most importantly, (iv) results-oriented process institutionalization. 
The ESSR stated that while the overall budgeting reform process will take time, a number of measures, if taken 
in the near future, would expedite the results-oriented budgeting transformation. They are: 

Set and disseminate a medium-term macroeconomic framework (MTEF) with overall and sectorial 
binding budget ceilings for the next budget cycle, and indicative budget envelopes for the coming two 
years should be reflected in the budget circular.

Introduce an effective public expenditure tracking system (PETS) to better monitor budget execution.

Unify the management of the recurrent and investment budgets.

Launch pilots in order to introduce a more results-oriented budget process in selective agencies; such 
an initiative would require adjustment of their respective budget classification and nomenclature, 
budget outcomes and key performance indicators (Sattar, 2001). 
In response to these recommendations and based 
on the initiative of Egypt’s former Minister of Finance (1111
-
2004), who was eager to reform the budget in order to achieve a greater focus on improving the 
government’s 
performance efficiently and effectively, the MOF did the following:

started the budget cycle preparation of FY2001/02 onwards with a system of budget envelopes in 
cooperation with a number of ministries, namely the Ministry of Health (MOH); Ministry of Education 
(MOE), and other infrastructure ministries, such as construction, sewerage, electricity, etc.; 

embarked on the development of an MIS/IT system for expenditures at the MOF, central and local 
government levels in order to record, report and decide on expenditure appropriations;

placed the National Investment Bank, the government agency responsible for expending on capital 
projects, under the MOF’s chairmanship in order to coordinate both the recurrent and investment sides 
of the national budget; and 

collaborated with the WB
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to prepare a diagnostic mission which was received by the GOE in June 
2001.
The WB diagnostic mission met and interviewed government officials, academics, donors and others; reviewed 
a variety of reports and documents to learn how a shift to results-based monitoring and evaluation could 
strengthen effective public management in Egypt; identified the organizations (in whole or in part) that were 
beginning to move toward outcome-budgeting in order to achieve development goals; mapped the efforts 
currently underway and performed an assessment of research and data collection capacity inside and outside the 
government; searched for evidence of performance-based budgeting and process innovation that would 
strengthen the monitoring and evaluation process; and sought to identify practical steps to encourage the 
development of a “climate of performance” in the Egyptian 
Government at the request of the Minister of 
Finance. 
The team’s review questions included:

What is the driving need for results-based monitoring and evaluation systems in Egypt 
(incentives/demands)? 

Where in the government does accountability for effective and efficient delivery of programs lie? 

Is there a codified (through statute or mandate) strategy or organization in the government for tracking 
development goals? 

Where does capacity lie with the requisite skills for designing and using results-based monitoring and 
evaluation systems in the pilot country? How has this capacity (or lack thereof) contributed to the use 
of monitoring and evaluation in the context of the country? 
The team found significant interest in moving towa
rd a “climate of performance”. T
here was a common desire 
to use quality information to allocate resources, assess progress and achieve development goals in the most 

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Interdisciplinary Journal of Research in Business ISSN: 2046-7141
Vol. 2, Issue. 9, (pp.13- 25)