Egypt’s President Abdel Fattah Al-Sisi announced a significant social protection package worth EGP 180bn to address the country’s rising inflation and support workers across various sectors.
The package, described as the “largest urgent social protection package” in the country’s history, includes a substantial increase in the minimum wage, pension hikes, and additional measures to ease the financial burden on citizens.
Egypt has raised the minimum wage by 50% to EGP 6,000 Egyptian as part of an EGP 180bn social protection package, the Egyptian presidency announced in a press statement on Wednesday.
The statement said that Egyptian President Al-Sisi has directed them to increase the wages of state and economic entity workers by a minimum of EGP 1,000 to EGP 1,200 depending on their job grade.
The package includes EGP 15bn in additional increases for doctors, nurses, teachers, and university faculty members, as well as EGP 6bn to appoint 120,000 members of the medical professions, teachers, and other administrative workers.
The social package also includes a 15% increase in pensions for 13 million Egyptians at a total cost of EGP 74bn, and a 15% increase in “Takaful and Karama” pensions at a cost of EGP 5.5bn, bringing the total increase over the year to 55% of the pension value.
According to the statement, EGP 41bn will be allocated for “Takaful and Karama” pensions in the fiscal year 2024/2025.
The social package also includes “raising the tax exemption limit for all state, government, and private sector employees by 33%, from EGP 45,000 to EGP 60,000 pounds, at a total annual cost of EGP 5 billion.
Wave of Inflation
In September, the Egyptian president directed the government to increase the “exceptional cost of living allowance” for public sector employees to EGP 600 from EGP 300 and to increase the minimum income for the sixth job grade to EGP 4,000 from EGP 3,500.
Egypt is experiencing a wave of high inflation, with official figures exceeding 30%, and there has been a large and frequent increase in the prices of all goods, services, vegetables, fruits, and white and red meat.
The price of the dollar on the black market reached EGP 70 at the end of last week, before retreating to between EGP 52 and EGP 55 currently, according to dealers in the parallel market on condition of anonymity.
However, the gap with the official rate of EGP 30.9 per dollar since last year remains large, confirming the severe shortage of foreign currency that Egypt is suffering from.
A mission from the International Monetary Fund (IMF) to Egypt announced “excellent progress in the discussions on the comprehensive policy package needed to reach a staff-level agreement for the first and second combined reviews of Egypt’s economic reform program supported by the Fund.”
