Egypt Weighs Shifting Food Subsidies to Cash Payments

Egypt is considering shifting its food subsidy system from in-kind support to direct cash payments, according to statements from Prime Minister Mostafa Madbouly. This change, potentially starting in the next fiscal year, aims to provide direct financial assistance to the country’s poorest citizens. Currently, over 60 million Egyptians benefit from subsidized food items like pasta, cooking oil, and sugar, while an additional 10 million receive subsidized bread. Madbouly expressed optimism about the potential for an initial phase of this transition in the coming fiscal year, contingent on reaching a consensus during ongoing national dialogue discussions about broader reforms. While the Minister of Supply and Internal Trade, Dr. Sherif Farouk, acknowledged the possibility of transitioning to cash subsidies, he emphasized that no decision has been made yet and that the idea remains under review. He stressed that both in-kind and cash subsidies have pros and cons, and the ministry will prioritize the best outcome for citizens after thorough deliberation. The move towards cash subsidies has garnered support from some groups, like the Citizens Against High Prices Association, which argues that it would prevent corruption and ensure that support reaches its intended recipients. However, some economists, like Ayel Al-Nahas, have expressed concerns about the potential for funds to be diverted away from food purchases, highlighting the need for effective measures to ensure that cash transfers benefit the most vulnerable populations.