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Sunday, 20 October 2019

Egypt's government plans second phase of economic reforms

The new phase will include the introduction of a new food subsidy system for low-income citizens

Ahram Online , Tuesday 29 Nov 2016
Sherif Ismail
Prime Minister Sherif Ismail (photo: reuters)
Views: 3541
Views: 3541

The Egyptian government is planning a second phase of economic reforms to be discussed by the cabinet before being presented to President Abdel-Fattah El-Sisi, Al-Ahram Arabic news website reported on Tuesday, citing anonymous sources.

According to Al-Ahram, the new measures will include imposing progressive taxes, linking the automated wage system with citizens' national identification numbers so as to distribute food subsidies based on monthly income.

The proposed system would provide a 100 percent subsidy for Egyptians who earn less than EGP 2,500 per month, 75 percent for those who earn less than EGP 3,500, and 25 percent for those who make less than EGP 4,500.

Egyptians whose monthly wages are more than EGP 4,500 will not be eligible for the food subsidy system.

The Ministry of Supply announced on Tuesday that it would give food subsidy recipients a three-month period to submit their updated information to benefit from the new system.

In 2014, Egypt embarked on a plan to introduce a number of fiscal reforms, including fuel subsidy cuts that increased prices up to 78 percent, as well as imposing new taxes to ease a growing budget deficit.

Earlier this month, Egypt's central bank decided to freely float the pound and raise key interest rates as part of a set of reforms aimed at alleviating a dollar shortage and stabilising the country's flagging economy.

The government has since adopted a number of measures to ease the impact of these economic reforms.

The measures include raising the food subsidy bill from EGP 18 to 21 per person, raising the supply prices of some basic crops to support local farmers, increasing food subsidies, as well as increasing the annual pay raise for the public sector from 5 to 7 percent.

Nearly 71 million people in Egypt use subsidy cards to buy essential foodstuffs, according an October statement by supply minister Mohamed Ali El-Sheikh. 

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