Egypt’s finance ministry has reconsidered starting a conditional cash transfer programme to help impoverished families as a part of the government’s plan to optimise social justice, an official told Ahram Online on Tuesday.
Conditional cash transfer programmes (CCTs) work by making the receipt of government welfare funds conditional on recipients carrying out certain actions.
“CCT programmes have been fruitful in Brazil, Chile and Mexico, and we plan to achieve the same result and reduce the poverty rate in Egypt,” Mesbah Qotb, the advisor to the Egyptian finance minister told Ahram Online.
Qotb said that the Egyptian initiative is similar to a Mexican initiative to combat poverty, the "Oportunidades" programme.
In the early 2000s, the Mexican government launched a programme helping poor families in rural and urban communities invest in human capital by improving the education, health, and nutrition of their children.
“The conditions are quite simple; for families that want to get cash, they have mainly to take care of their children’s health and education,” Qotb said.
The ministry of finance has not released any details about the programme, including the amount of money that will be allocated, the beneficiaries or the regions targeted.
"The bodies and authorities that are tasked with the matter will schedule several meetings to agree on the mechanism of implementing the initiative," Qotb told Ahram Online.
Qotb said that the ministry is currently restructuring the social protection system to better aid poor families, and added that the new scheme will contribute to subsidy reform.
According to official data, Egypt’s poverty rate has increased in recent years, reaching an average of 25.5 percent for the year 2010/2011, compared with 21.6 percent in 2008/2009.
Poverty is particularly prevalent in rural areas, where 69 percent of the population is below the poverty line.
Egypt’s subsidy bill was planned to reach around LE146 billion in the 2012/13 fiscal year; however the government expects to spend around LE205 billion on subsidies in the current fiscal year 2013/14.
A similar programme was planned under ousted president Hosni Mubarak, but was never completed.
In 2008, Mubarak announced a programme to improve living conditions in the poorest 1,000 villages in Egypt.
The villages were selected by a study prepared by the Ministry of Economic Development, at the time in cooperation with the World Bank and the UN Development Programme.
The study identified four Upper Egyptian governorates (Beni Suef, Minya, Assiut and Sohag) as including 150 of the poorest villages in Egypt.