Parliament will have a busy schedule next week, as before it signs off for the summer vacation MPs will be required to discuss and vote on a number of major pieces of economic legislation. Topping the list is a draft bill aimed at regulating the performance of the Central Bank of Egypt (CBE) and the banking sector. The bill, whose 294 articles were discussed and passed by MPs in a plenary meeting on 17 May, has been referred to the State Council to be revised in constitutional and legal terms. Chair of the parliament's Economic Affairs Committee Ahmed Samir said on Monday that the CBE bill was expected to be up for a final vote when parliament met on Sunday 19 July. “We received the remarks raised by the State Council and discussed them in meetings on Monday and Tuesday, after which the final text of the bill could be ready for a final vote next week,” Samir said. Samir indicated that the State Council had stressed that the CBE governor, his two deputies, and members of the board should not be members of any political party. “The objective of this stipulation is to ensure the non-political character of the CBE, whose policies should be exclusively directed by state interests,” he said, adding that “if the Muslim Brotherhood reached power and decided to appoint a member of its party as CBE governor, this would mean that the CBE had become politicised.” Gamal Negm, the CBE deputy governor, said the CBE should be considered the state bank and not the bank of any particular political party or institution. Samir said that the final text of Article 21 of the draft law now states that the CBE's governor, his two deputies, and board members shall not be members of any political party or any government body. “The CBE should be fully independent, only observing the country's economic interests,” he said. He said committee members had also approved on Monday a law under preparation since 2017 to raise the CBE's capital to LE20 billion to help it exercise its financial obligations. “The CBE governor will be named by the president of the republic and ratified by parliament. The governor will stay in office for a once-renewable four-year term,” he added. Samir said he hoped that once passed the law would spur the CBE to take initiatives to stimulate economic growth and put an end to the slump in demand caused by the coronavirus pandemic. The draft law also tackles the CBE's role in licensing foreign banks and representation offices in Egypt. It stipulates that banks operating in Egypt should have capital of at least LE5 billion and representation offices should have capital of at least $150 million. The law creates a new system for settling the conditions for defaulting banks, with the objective of maintaining the stability of the banking sector and protecting the interests of depositors. It also aims to catch up on the latest developments in the banking sector and on operations and services such as e-payments, fintech businesses, and cryptocurrencies. Samir said parliament was also expected to take a final vote on government-drafted amendments to the law on public-sector companies (203/1991) before the summer recess. The law, approved in principle by parliament in a plenary session on 7 June, includes amendments to 29 articles. Final approval was postponed until the draft law was revised by the State Council. Samir said that committee members had discussed the council's remarks in a meeting on Tuesday. He indicated that the council had said that the draft law could not be put up for a final vote before parliament had sought the opinion of the General Egyptian Federation of Trade Unions (GEFTU). “Many of the law's articles and provisions tackle the interests of workers, and so it is necessary that parliament identify the opinions of the GEFTU beforehand in line with Article 145 of the Labour Law (12/2003),” the State Council said, adding that “some of the law's articles also contravene Article 76 of the constitution, which states that members of trade unions and professional syndicates shall have the right to exercise their roles freely. “Some of the articles impose restrictions on workers, and this violates Article 76 of the constitution.” The amendments to the public-sector companies law faced objections from workers and their representatives in parliament when it came up for discussion last May. Gibali Al-Maraghi, chair of parliament's Labour Committee, said the amendments introduced by the government would negatively affect the interests of workers and trade unions and pave the way for privatisations. “After much discussion of the amendments by the committee, all members agreed that they were not in the interest of workers and companies in all industrial sectors in Egypt,” Al-Maraghi said. Committee member and GEFTU Secretary-General Mohamed Wahba said the amendments opened the way for privatising public-sector companies in a way detrimental to the interests of thousands of workers. “Article 38 of the newly amended law states that a company incurring losses that exceed half its capital shall be liquidated,” Wahba said, adding that this would push 40 per cent of companies into liquidation and harm thousands of workers. Wahba said workers and trade-union activists had expected that the amendments would reflect a new government policy aimed at upgrading industrial companies. “But we were surprised to find that the amendments opted for the easy way out, which is liquidating and selling companies rather than streamlining their performance,” Wahba said. Another law ready for a final vote is that regulating the fees imposed on radio and wireless services (77/1968). The draft law, approved by parliament's Budget Committee, states that owners of all kinds of cars and vehicles equipped with radios or wireless devices shall pay a fee of LE100 per year, instead of LE1.4 at present. Parliament is also expected to discuss a draft law on unified tax procedures. The law, approved by parliament's Budget Committee on 6 July, regulates procedures for collecting income tax, value-added tax, the financial resources development fee, the stamp tax, and other similar taxes. “Unifying all these taxes under one system aims to facilitate collection procedures, fight tax evasion, and boost revenues,” the committee said. Also featuring on parliament's agenda is the draft customs law approved by the Budget Committee last April. Hussein Eissa, head of the committee, said the new law would be ready for discussion before parliament next week. “The new customs law aims to put Egypt in line with the latest global developments in the area of international trade and improve its position in the international index of world trade in terms of adopting online services, introducing a ‘one-window' system, and facilitating customs release,” Eissa said.
*A version of this article appears in print in the 16 July, 2020 edition of Al-Ahram Weekly
