Egypt Eyes Bread Subsidy Overhaul as Global Inflation Bites

Egypt is considering replacing the popular bread subsidy with cash payments to the poor to protect the budget from a sharp rise in international wheat prices (Reuters)
Egypt is considering replacing the popular bread subsidy with cash payments to the poor to protect the budget from a sharp rise in international wheat prices (Reuters)
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Egypt Eyes Bread Subsidy Overhaul as Global Inflation Bites

Egypt is considering replacing the popular bread subsidy with cash payments to the poor to protect the budget from a sharp rise in international wheat prices (Reuters)
Egypt is considering replacing the popular bread subsidy with cash payments to the poor to protect the budget from a sharp rise in international wheat prices (Reuters)

Egypt is considering replacing a popular bread subsidy with cash payments for the poor to protect the budget from soaring global wheat prices, but domestic inflation could make the government opt for a less ambitious reform.

Under the existing program, more than 60 million Egyptians, or nearly two thirds of the population, get five loaves of round bread daily for 50 cents a month, little changed since countrywide “bread riots” prevented a price hike in the 1970s.

The handout is a lifeline to the poor, but is widely criticized as wasteful. High global prices for wheat, which Egypt imports on a vast scale, led President Abdel Fattah al-Sisi to say last year that it was time to tackle the bread subsidy.

Ali Moselhy, the minister in charge of subsidies, told Reuters that inflation, which has climbed in recent months to 6% from 4% earlier in 2021, made it harder to replace the support for bread and other food with cash handouts.

“When inflation is stable, then you can introduce cash,” he said.

Moselhy has said he personally favors giving people money specifically to buy bread. Eligible Egyptians already get a monthly $3.20 voucher for other subsidised food.

However, he said a broader idea to introduce unconditional payments, favored by many economists as the most efficient welfare system, risked driving up prices by putting more cash into circulation at a time of rising inflation.

The government aims to draw up a plan for reformed food subsidies in time for March budget preparations, officials have recently said.

Moselhy said that for now, the government had not taken a decision on what to do, and was focused on improving the database of recipients, with the intention of “finding out who needs what.”

That could mean that any changes are more limited in nature, perhaps trimming the program through means testing, restricting how many people in a household are eligible, or increasing the price of subsidized bread.

Bassant Ibrahim, 36, a housewife living in Beheira, north-west of Cairo, said any such restrictions should not hurt families like hers, which relies on the subsidies to bolster her husband's $180-a-month teaching salary and feed four children.

"There are rich people with cards who you can sift out, but the poor shouldn't have to pay the price," said Ibrahim, who said the family daily ate the ten loaves of bread they received, sometimes finishing them by lunchtime.

Ahmed Mohamed, 24, a married gardener in Cairo with two children, said he could live without the government paying for his daily bread.

"There are other people who need it more than I do," he said.

However, Ahmed Darwish, a former minister who oversaw a transition to a smart subsidy card system in the early 2000s, said authorities would have to step carefully to reassure people that any changes will not leave them overly exposed.

"Until the government says that this subsidy would be increased with inflation, they have to comfort people," Darwish said.



Green Investments Surge in Saudi Arabia with Circular Economy, Clean Hydrogen Tech

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Green Investments Surge in Saudi Arabia with Circular Economy, Clean Hydrogen Tech

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Saudi Arabia is pushing towards achieving carbon neutrality by 2060 and developing a green economy.
Skytower Investments, a renewable technology, green manufacturing, supply chain and green power production investment company, is actively seeking new partnerships to advance carbon and green hydrogen technologies.
Such initiatives will bring new economic opportunities to Saudi Arabia.
Skytower Investments predicted Saudi Arabia attracting more investments in upcoming projects, creating opportunities for global companies and boosting job growth. This supports Saudi Arabia’s role as a driver of sustainable growth in the region, with plans underway to foster green economy development.
The investment company has backed a recent agreement between Riyadh and Washington for a transcontinental green trade corridor, aiming to facilitate trade and climate adaptation strategies.
Saudi Arabia is promoting this initiative globally, benefiting neighboring and South Asian countries. It aims to expand green supply chains, green manufacturing, and digital transformation, contributing to a sustainable future.
Hydrogen production is seen as economically valuable for Saudi Arabia, leveraging its abundant natural resources and young, dynamic population.
The Kingdom’s green potential lies in its high-quality silica resources, used for green energy production and advanced manufacturing.
Chairman Neil Bush of Skytower Investments highlighted ongoing efforts to strengthen partnerships and support Saudi Arabia’s economic goals under Vision 2030. This includes promoting green energy, green hydrogen, and carbon economy technologies.
Skytower Investments CEO Eric Fang aligned current efforts with Saudi Arabia’s strategy to support local, regional, and global development, focusing on high-quality job creation in the green industry.
Saudi partner Abdullah bin Zaid Al Mulaifi mentioned rapid progress in introducing green energy and technologies, supporting Saudi Arabia’s goals for green and carbon-neutral energy by 2060.
Skytower Investments plans to invest further in specialized global technologies, collaborating with public and private sectors in the Kingdom.