No. of pages: 70
Publication date: 20 April 2015
This study is a follow up study of an earlier study conducted by the Policy
Project (Chao,2005) aimed to demonstrate the financial benefits and costs of family
planning programs in Egypt, and to help governments in their decision to allocate
their scarce resources to such programs. It measured the financial benefits and costs of
family planning programs in Egypt over a thirty years period (2000-2030), and
compared its monetary costs to the monetary benefits in terms of reduced levels of
social services required at lower levels of fertility, or in other words the savings in
government expenditures on social services.
The study at hand gains its importance from the recent significant increase of the
population problem, and aims to update the estimation for the benefits and costs of the
family planning program in Egypt. It is noteworthy that this report extends the
projections timeframe to more than thirty years (2014-2050), to align the timespan to
the National Strategy for Family Planning in Egypt. We rely on the actual expenditure
on social services according to the Egyptian budget for the fiscal year 2012/2013.
We also provide results for the thirty year period (2014-2044) in Appendix A and B.
The results in Appendix A are based on the actual expenditure on services for the
fiscal year 2012/2013.The estimation in Appendix B, is based on the expected
expenditure on services for the fiscal year 2014/2015.
Hence the main purpose of this report is to update the analysis by Chao (2005) using
the same methodology (benefit-cost analysis) to compare the current situation with the
results of the previous study on the Egyptian family planning program.
It is also important to note that Chao’s report was a follow up of Moreland study that
was conducted in 1996 to support a strong public family planning program in Egypt.
This study also indicated significant financial returns for investment in family
planning programs in Egypt.
The objective of this report is comparable to the objectives of Chao’s study (2005)
and can be summarized into the following:
(1)” To estimate the impacts of family planning programs on government
expenditures for social services such as health, education, housing, and food
(2) To compare reductions in government social services spending as a result of
family planning programs to the costs of family planning services; and
(3) To show the financial viability of family planning programs, and their
effectiveness in improving the quality of social services”.
This report estimated the number of births averted due to the family planning program
at 43.31 million births for the period (2014-2050), at an estimated cost for family
planning programs of around EGP 8 billion.
The benefit- cost ratio increased from EGP 40.27 (Chao, 2005) to EGP 56.12 in this
study, which means that the average return on each Egyptian Pound spent on the
family planning program, is estimated at EGP 56.12 for the period (2014-2050). The
benefit - cost analysis is based on the projection of government expenditure on family
planning over the period 2014-2050 and the saving in government expenditure on
health, education, food subsidy and housing due to the number of births averted by the
family planning program over the same period. The saving in expenditure is only
focused on public expenditure that is directly related to population growth. The
projection of government expenditure saving includes total saving as well as sectorial
saving on health, education, food subsidy and housing.
The benefit- cost (EGP 56.12) is the sum of the benefit-cost of health (EGP9.24),
education (EGP31.15), food subsidy (EGP11.52) and housing and utilities (EGP4.21).
These results show that the major saving will occur in the education expenditure,
followed by food subsidy, health and housing and utilities. These results depend on
the 2012/2013 actual expenditure figures.
The net savings stream was used in the calculation of the internal rate of return (IRR),
which refers to the discount rate that makes the net present value of all cash flows
from a particular project equal to zero. In other words it equates the present value of
all costs with the present value of all benefits. The higher a project’s IRR, the more
desirable it is to undertake the project. The IRR for the family planning program
2014-2050 is 199.4%, compared to 182% for the Chao (2005) study. This is a
relatively high IRR compared to ordinary investment projects and would suggest the
approval of this project.
For sensitivity reasons the authors calculated in Appendix A, of this report the
benefit-cost ratio over the period 2014-2044 which also shows an increase in the
benefit- cost ratio from EGP40.27 (Chao, 2005) to EGP 46.56 for the period. The
benefit- cost analysis presented in the Appendix A depends on the actual budget
figures of 2012/2013. The forecasted increase in government expenditure will lead to
an increase in the benefit-cost ratio, as everything else being equal the higher the
expenditure of the government on social services and the more expenditure per person
the higher the benefit- cost ratio for the family planning program. In Appendix B we
show a benefit-cost ratio reaching EGP52.78 for the period 2014-2044. The benefitcost
ratio in Appendix B depends on the expected budget figures of 2014/2015, with a
projection of the actual 2012/2013 figures of educational costs to the year 2014/2015.