Parliament considers cash subsidies instead of in-kind ones

CAIRO – 1 July 2017: The Parliament’s Planning and Budget Committee asked the government to convert energy and food subsidies into cash subsidies, committee chairman Hussein Eissa said Saturday.

The conversion can be done in a period spanning between six months and one year, Eissa told Egypt Today.

“This can be done on stages, the first stage has already been taken, which is renewing the database of beneficiaries of subsidies programs,” he said, adding that the second stage should be determining the criteria for who deserves these subsidies.

Subsidies’ beneficiaries can be divided into tranches; high, medium and low, then the value of cash subsidies for each tranche can be determined, Eissa explained.
The Egyptian government is already providing cash assistance to different sets of beneficiaries, under its social safety network.

In June, allocations for the social safety network were announced, pushing the FY2017/2018 budget to LE 1.2 trillion ($4.1 billion).
Under the new decisions, an individual's share from a ration card would be increased from LE 21 ($1.16) to LE 50 ($2.76), increasing allocations of food subsidies in the budget from LE 47 billion to LE 85 billion in FY2016/2017.

A 15 percent hike in the value of pensions for elderly citizens was also announced, costing the budget another LE 23-24 billion and elevating the contribution of the pensions and social insurance in the budget to LE 190 billion.

Allocations for the Ministry of Social Solidarity’s program for the poor, “Takaful and Karama’s,” will increase by LE 2 billion to meet a LE 100 surge in the share of each beneficiary, making the total value borne by the government for the program LE 8.36 billion.

Egypt launched the Takaful and Karama program in 2015 to provide direct financial support to the neediest people in different villages. The budget allocation of the project was LE 4 billion in 2016.