Supply Minister says Egypt’s subsidy system unsustainable, calls for reforms

Daily News Egypt
1 Min Read
TO GO WITH AFP WORLD INFLATION SERIES: An Egyptian woman looks at goods at a supermarket in Cairo on March 12, 2008. The Egyptian government has been struggling to tackle a growing tide of discontent over the sky-rocketing prices of goods. Last week, the authorities announced plans to suspend rice exports for six months from April and the commerce ministry said cement exports will also be frozen over the same period in a bid to combat price rises. Official figures show staple food prices spiralling in Egypt, the world's largest consumer of bread, by 26.5 percent in a year. AFP PHOTO/ KHALED DESOUKI

The current subsidy system in Egypt is unsustainable while the state targets the most vulnerable groups, the Minister of Supply and Internal Trading, Aly Meselhi, said on Monday.

He added that subsidies are important to achieve social protection and justice. “It is not an economic disaster as some see it.”

Meselhi’s statement came during a workshop organised by the World Bank in cooperation with the ministry of supply under the title “Reform of the ration subsidy system.”

The minister stressed the need for reforming the subsidy system to ensure that eligible beneficiaries receive support.

In March, Meselhi announced that ineligible citizens will be eliminated from the second stage of ration cards. “It does not make any sense that someone who pays EGP 1,000 for phone or electricity bills has a ration card,” he said at the time.

In July 2017, the value of ration subsidy increased by 138% from EGP 21 to EGP 50 per person, after increasing the value of subsidies in the state’s general budget from EGP 45bn to EGP 85bn. The move came to cope with the soaring inflation, following the currency devaluation and the energy subsidy cuts.

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