CAIRO – 7 October 2023: Egypt's government has committed an impressive LE529.7 billion in the current fiscal year, marking a 48.8 percent increase from the previous fiscal year's budget, with a primary focus on safeguarding low-income citizens from the economic repercussions of rising commodity and service prices.
The nation has expanded its social protection umbrella, giving priority care to those most in need through three strategic pillars.
The food subsidy system, which caters to more than two-thirds of the population, has been a central concern of the Egyptian administration, led by President Abdel Fattah El-Sisi. Over recent years, the government has taken measures to optimize the food subsidy system. These efforts aim to curb excessive consumption, combat the black market trade of subsidized goods, and ensure that subsidies reach those who truly require them.
In 2014/2015, the "Unused Bread Points" system was introduced, and the food subsidy system was restructured with the automation of food ration cards. The government has also increased the number of outlets providing subsidized bread to citizens, providing approximately 250 to 270 million loaves daily at a fixed price of 5 piasters per loaf.
Allocations for social solidarity pensions have surged from LE4.9 billion in 2013/2014 to LE22 billion in the 2022-2023 budget. In the 2023-2024 budget, this allocation has been further increased to LE31 billion to protect a wide range of individuals from falling into poverty.
Through the improvement and expansion of social security services, the government provides monthly assistance to low-income families based on economic and social assessments.
It also offers exceptional aid for education expenses, funeral expenses, urgent emergency cases, child allowances up to the age of 18, monthly scholarships, disaster compensation, and increased state contributions to pension funds, which have grown from LE29.2 billion in 2013/2014 to LE202 billion in the 2023-2024 budget. Insurance and healthcare coverage funded by the government has also increased to LE14.1 billion in 2023.
Launched in 2015, the Takaful and Karama program is an extensive social protection initiative that targets both economically disadvantaged families and specific groups, such as women, the elderly, and persons with disabilities. The program has benefitted approximately 5.2 million families. In 2023-2024, the budget has allocated around LE36 billion for cash assistance.
Egypt has consistently increased wages and pensions in line with inflation rates and the rising prices resulting from successive global crises. Wages have risen by 120 percent in the general state budget over the years of economic reform, reaching around LE214 billion in the year of economic reform (2015/2016), compared to the budget target of LE470 billion.
Minimum wages have increased fivefold over the past four years, contradicting economic reform policies and international program implementation. This underscores the government's commitment to improving the lives of Egyptians and alleviating the pressures of global crises.
The minimum wage has risen from LE1,200 in March 2019 to LE4,000 in September 2023, an increase of over 230 percent during those years.
In terms of pensions, the government introduced the new Social Insurance and Pensions Act in August 2019. It linked pension increases to inflation rates and expanded coverage to include many previously uncovered working groups.
The Act also outlines a plan to raise the retirement age to 65 by 2040, in addition to regular pension increases paralleling wage hikes to keep pace with rising inflation.
Egypt's proactive and multi-faceted approach to social protection demonstrates its commitment to ensuring the welfare of its citizens, particularly those most vulnerable to economic challenges.
These measures aim to create a more inclusive and equitable society, while economic reforms are designed to foster sustainable development and growth.
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