Finance Minister defends 11% reduction of gov’t bread subsidy

CAIRO  - 2 June 2024: Egyptians pay only 15% of the cost of a subsidized loaf of bread even after the 15 piasters price increase, Minister of Finance Mohamed Maait told the parliament Sunday. 

Discussing the general report of the Plan and Budget Committee regarding the draft economic and social development plan for the fiscal year 2024/2025, Maait said the government was aiming for the price of an ardab of local wheat to be around LE1,400 pounds, but the Cabinet decided to make the price more profitable for the farmer, reaching the LE2,000 in the current budget. 

The government pays farmers some LE50.5 billion for local wheat, and imports from 5.5 to 6 million tons more. In the past, the maximum price was $240 per ton, and with the current inflationary wave it has exceeded $500 per ton. Today, Egypt imports 6 million tons, costing LE80 billion or more, the minister explained.

More than LE130 billion are borne by the government during the fiscal year to provide wheat, whether from farmers or importers.

Egypt produces about 100 billion subsidized loaves annually and sold a loaf for 5 piasters. A loaf costs 125 piasters, meaning the citizen pays 4% of the cost. When the government decided to sell it for 20 piasters, it meant it would still pay for 85% of its price, the minister of finance emphasized. 

Bread is a staple in Egyptian meals and has been heavily subsidized since the 1950s, rendering many people dependent on almost free bread and the idea of paying its full price has repeatedly triggered protests.