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Public Spendings on Education and Healthcare: Expectations versus Reality

By: Abdelrahman Eyad
Due to the absence of internists and intensivists in the hospital, a seventy-year-old man with critical illness had to spend irreversible long time in vain. Eventually, his family managed to carry him on an ambulance, moving Naeem Boghadady from Rass al-Barr Hospital to the Ambulatory Care Hospital in the same city of Damietta governorate. Finally arriving, they found Naeem had already fallen into a coma and died. It was too late.

Naeem’s case isn’t one of its kind. On the same day, other patients in Rass al-Barr Hospital also got stuck in the elevator after breaking in the middle of the way.

As a result, Deputy Director of Health Directorate at Damietta governorate admitted to the press underperformance and failure of the hospital.

Spending increases, underperformance remains

But Egypt doesn’t suffer from underperformance of just one hospital. Such incidents happen every now and then. In addition, Egyptian doctors always protest low salaries.

The malfunction of medical care system pushed towards stating fixed figure of expenditure on health sector under the constitution approved in 2014. The current constitution requires the government to spend 3% of its GDP on healthcare, effective from 2017, in an attempt to guarantee raising healthcare expenditure to reach international standards. And the government have already succeed at raising the budget of the health sector in recent years, reaching EGP105.2bn FY2017/18, up 40.3% from the EGP42.4bn recorded in FY2014/15.

Governorates share decreased

But what was that for real? The green part of the previous bar charts resembles the portion of directorates from the total spending on health. It’s clear that portion didn’t increase over the years. In fact, it slipped by more than EGP2bn, down from EGP25.4bn in 2014/15 to EGP23.1bn in 2017/18.

As a result, the spending per capita also decreased in most of the governorates. 
In the following visualization, you can hover over Damietta governorate in the map to know the healthcare public expenditure share of Boghdady, the old man who died at Rass al-Barr.

As you’re able to see, Boghdady’s share dropped two pounds over the four fiscal years. Public healthcare spending per capita even further dropped in a number of other governorates. For example, Beni Suef dropped to EGP199 in FY2017/18 from EGP316 in FY2014/15.

Meanwhile, it slightly increased in a number of other governorates.North Sinai, for instance, reached EGP1,002 up from EGP815. It is worth mentioning that border governorates usually have higher spending rate per person than central governorates, due to small number of population.

Items figure increased but slightly

On the other hand, figures of all the items included in health budget, like salaries and investments, have increased, but not with any higher rate than the usual, as shown below.

Now the question is, as long as the governorates share of spending didn’t increase, and share of included items also didn’t increase more than the usual, what does the new budget figure, EGP105.2bn, consist of?

Newly added items

We found the answer in a financial statement released by the Ministry of Finance. The statement reveals that the healthcare expenditure has reached its constitutional goal only due to the moving a number of items from other budgets to be covered by the healthcare budget. The new items that have been added to healthcare budget in the last fiscal year include drinking and sewage water costs and debts of healthcare sector. Both items were originally covered by other budgets before.

In fact, the original items of healthcare budget didn’t receive except EGP54.9bn, and the rest of the EGP105bn went for the new items.

“The governmental calculation for public healthcare expenditure is false in many aspects,” Salma Hussien, a researcher at the Egyptian Initiative for Personal Rights (EIPR), told Infotimes. She added that it doesn’t track with the international definitions and standards approved by the World Bank (WB).

“The government has now injected the healthcare budget with a number of items that do not belong to it,” she said.

Hussien also said that the government calculated the 3% percentage-goal out of the GDP of the last year, not the current one, which leads to less actual spending on healthcare. That means that expenditure on healthcare in FY2017/18 should be even higher than the recently reached EGP105.2bn.

The Ministry’s statement, on the other side, insists that it abides by the WB standards.

Governorates share of spending on education also dropped

The same story can be told about public spending on education. The constitution stated 4% of GDP spending on the sector, aiming to raise its budget. The government did succeed at reaching the constitutional percentage, but with the same indirect ways of adding previously-unincluded items.

Despite that governorates share of spending on education didn’t decrease over the years like on healthcare, it didn’t increase by a higher rate under the new budget figure. Spending per capita also didn’t actually increase by a higher rate. The following visualization illustrates the change of spending and spending per capita on education in each governorate.

On one hand directorates share of public spending on education reached EGP70.5bn in FY2017/18, up from EGP67.8bn in 2014/15. On the other hand, the percentage of spending allocated for directorates out of the total spending on education actually decreased to only 33.7%, down from 70.8%.

The secret? It’s the same. Again, government has put new items that was originally covered by other budgets to be now calculated as a part of education budget. Azhari education, for example, is a newly added item. Debts on education sector is also now a part of the fattened budget.

“Figures of these newly added items are not clear in the governmental statements,” Hussien said. “This actually makes matters worse.”

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