After the 25 January Revolution, various initiatives called for launching voluntary funds to support the economy. These initiatives surpassed five funds, starting with the 25 January Fund launched by former minister of finance Samir Radwan. The second was the Eza and Karama Fund (Pride and Dignity Fund) called for by Sheikh Mohammed Hassan to end Egyptian dependence on American aid.
The third is the Nahda Fund (Renaissance Fund), which was launched under the Muslim Brotherhood. The third is the “306” fund, which refers to 30 June 2013, the date of the ouster of former president Mohamed Morsi, and the fifth is the Tahya Misr Fund (Long Live Egypt), which was inaugurated by President Abdel Fattah Al-Sisi and aims to bring in EGP 100bn to support the Egyptian economy.
The sixth fund is the Farhet Misr Fund to finance the opening ceremony of the New Suez Canal project. The fund account number is 6/8/2015 (the date of the canal opening) to receive donations from all citizens, institutions, individuals, businessmen, investors, national institutions and agencies and banks operating in the country.
The fund’s account will be closed if it reaches its targeted amount of money, which is estimated at $30m (EGP 227m).The new Suez Canal project’s opening will take place in the presence of a large crowd of national and international figures and presidents.
The head of the Suez Canal Authority (SCA), Mohab Mamish, declared in June 2015, that the Authority would not overload the state budget with the cost of the New Suez Canal’s opening ceremony.
The opening ceremony is organised by WPP, a multinational company listed on the London Stock Exchange (LSX). It is in an alliance of seven companies that won a tender put forward by the SCA for the implementation of a media campaign and the organisation of the opening ceremony.
The new Suez Canal project was launched in August 2014 by President Abdel Fattah Al-Sisi, referring to it as a national project. The Egyptian government announced, in September, the launch of five-year investment certificates, with an interest rate of 12% per year, to fund the drilling of the new canal, expanding and deepening the existing canal with a length of 72 km.
The government collected approximately EGP 64bn ($ 8.3bn), to implement the project through offering investment certificates in banks to citizens in September 2014.
No transparency or available information about the fund
Banking expert Basant Fahmy told Daily News Egypt that there is no available information about the Farhet Misr Fund and the collected donations, noting that the SCA announced the fund’s launch, and then remained completely silent about its details.
She added that perhaps the reason for the silence is that the fund did not collect as many donations as expected, unlike the donations collected for the establishment of the new canal. The economic conditions of citizens do not allow them to donate to the fund, in addition to the high cost of the opening, due to receiving delegations and building camps, as stated by the SCA.
“I hope that the SCA or the Central Bank of Egypt (CBE) will declare the amount requested, the amount collected and the number of donors in one of state-owned newspapers every three months,” said Fahmy. “The funds in Egypt should be controlled and supervised, because fundraising should be subject to the law and monitoring by the Central Auditing Organization (CAO), because Egyptians should know all the information about their money.”
She denounced the number of funds launched in the last period, while there is no available information, nor have any officials declared the role of these funds, their budgets and how the money will be spent.
In addition, there are no statements regarding the formation and structures of the funds, or the number of their offices or employees. She added that due to the lack of information, the funds are no longer attractive to citizen to donate.
Tahia Misr Fund acts as donation foundation for poor, not for national projects
Fahmy further criticised the Tahya Misr Fund (Long Live Egypt), noting that after a year of collecting donations, the fund has been restricted to distributing food to the underprivileged during Ramadan, despite the stated conception of the fund having been much more ambitious.
She commented, saying that, yet again, there is no available data on the fund, more than a year after it was established. Fahmy also pointed out that the performance of the government administration is unfortunate and unscientific in the manner of launching funds. She said the idea to launch a number of funds is sound, but there is a need to launch funds dedicated to developing slums and aiding the low-income segments.
Large number of funds reduces turnout to donate
Meanwhile, Faaka Refaie, former CBE deputy said the CBE is the main authority responsible for the collection of voluntary funds, and forms a committee inside the bank or appoints officials to monitor the donations the funds receive. The committee records the received money in cash or through transfers in special records to be submitted to the SCA.
Refaie said the CBE is a government broker to collect funds, and as soon as the deadline for receiving donations comes, the fund’s account is closed. The collected money is then handed to the SCA, either successively in the form of payments or as a full transfer. She noted that after transferring the fund’s money to the SCA, the authority will give the money to the international company responsible for organising the opening ceremony.
If the collected money is less than expected, Refaie added, the authority should cover the remaining costs from its revenues without burdening the state budget, as it announced before. If the collected money surpasses expectations, the authority should announce how it will spend the surplus.
Refaie explained that funds are not included in the CBE’s account, and enter under “off balance sheet” items. This means that there are some operations for which the bank acts in the place of other parties, and their accounts are outside the bank’s balance sheet and the state budget.
“The large number of funds reduces the turnout to donate and the government pressure on banks and businessmen makes donations unacceptable,” said Refaie. “It was possible for the government to find other ways to finance the ceremony, such as offering coupons for people wishing to attend the opening ceremony and selling those coupons with different values for the ceremony participants.”
She further suggested that it was possible for the government to sell broadcasting rights for the ceremony to satellite channels, as Egyptians and the whole world are interested in watching this important event.
However, these suggestions and solutions require greater effort and long procedures in cooperation with many other government agencies, and the idea for the fund was the easiest and least expensive, according to Refaie.
She said that these proposals nevertheless give the government more prestige than the funds, and the Suez Canal will serve the whole world, and as such it was possible for other countries to contribute.
Fund is opportunity for Egyptians to participate in Egypt’s celebrations
Meanwhile, Professor of Economics at Cairo University Rashad Abdo said that many low-income people volunteered to this fund because people want to rejoice.
He added that the president choose the idea of the fund to allow people to participate in the ceremony, and is considered propaganda for the Suez Canal Axis and its upcoming projects, which is projected to bring billions of dollars to the country.
Abdo expects that if there will be surplus in the fund’s money, it may be used in infrastructure projects in the Suez Canal Axis and expanding the east Port Said port. Nevertheless, if the collected money is less than expected, the Egyptian banks will fill the shortage.
Abdo called for entrenching a culture of corporate social responsibility (CSR), noting that businessmen and billionaires should donate to the country as it an international culture present all over the world.
In this context, a Suez Canal Authority official told Daily News Egypt that the expenses for the Suez Canal project’s opening ceremony have been collected through donations from several companies.
The firms’ donations varied between $250,000 to $1m, according to the anonymous source. The ceremony was set to cost $30m, but was reduced. The new figure was not disclosed.
Some of the donators included Orascom Construction Industries, Egyptian Steel, Ezz Steel and Talaat Moustafa Group (TMG). Banks that donated included the National Bank of Egypt (NBE), BanqueMisr, the Commercial International Bank (CIB), Abu Dhabi Islamic Bank (ADIB), Emirates NBD, the Arab African International Bank, and leading investment bank EFG Hermes. Donations also came in from the food industry companies Coca-Cola and the Suez Canal Container Terminal (SCCT).