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Better targeting poverty

Plans have been announced to merge existing cash-transfer programmes in order to deal better with poverty, reports Niveen Wahish

Niveen Wahish , Sunday 27 Oct 2019
Better targeting poverty
The government tackles poverty not only by cash transfers but by improving basic services
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The government is targeting to merge all its existing cash-transfer programmes intended to tackle the country’s high poverty rates into one by the end of 2019.

The combined programmes will include the 3.4 million beneficiaries of the social-security system as well as of the Takaful and Karama cash transfer programmes, Minister of Social Solidarity Ghada Wali said this week.

Addressing the American Chamber of Commerce in Cairo (AmCham), Wali showed that the allocations for the cash-transfer programmes had increased from LE6.6 billion in 2014-15 to LE18.7 billion in the current fiscal year 2019-20.

This had been possible “thanks to the restructuring of fuel subsidies,” she said. Since reforming the fuel subsidies system, the government has been able to better target its funds and channel more into the cash transfer programmes.

Acknowledging that Egypt’s growth had not always been inclusive, Wali said that “a lot of subsidies were going to the wrong people,” referring to how fuel subsidies, which stood at around six per cent of GDP earlier, had not only been higher than health and education expenditures combined but had mainly benefited the better off.

She showed that around 40 per cent of those that had benefitted from the fuel subsidies had been the non-poor.

The conditional cash-transfer programmes of Takaful and Karama now reach over 5,500 villages in 27 governorates, according to Wali. She said 72 per cent of beneficiaries were in Upper Egypt where poverty is highest, with the governorate of Sohag taking the lion’s share.

She also showed that 88 per cent of the beneficiaries were women. “If you want to achieve development, educate girls and empower women,” she stressed.

Egypt’s poverty rate stood at 32.5 per cent in 2018 from 27.8 per cent in 2015, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). The highest percentage of poverty was recorded in Upper Egypt.

Wali pointed out that poverty is dynamic, with basic needs changing with time, age, gender, health status, geographical location and culture, and tackling it needs to take all these elements into consideration.

To be able to do that, she said that the government was employing a multidimensional poverty index that takes into account, schooling, the health conditions of children, and standard of living, such as whether there is access to clean water, electricity and sanitation.

Using the index, the government is implementing an integrated social-protection system that not only involves cash transfers and ration cards, but also works on improving healthcare, school meals, village and urban development, social housing, and employment and social insurance, Wali said.

She gave the example of the new universal healthcare system that is currently being rolled out.

According to Wali, although the cash transfers have not been sufficient to provide the large investments needed to get people out of poverty for the moment, the Takaful programme has helped increase the value of household consumption for beneficiary households by 8.4 per cent compared to households that do not benefit from it.

It has also reduced the probability of beneficiary households falling below the poverty line by 12 per cent. Moreover, the cash received from the programme is reported to have covered repayment of debts, late bills for services, and the fulfillment of child education commitments and food purchases. Some households have reported using the cash support for micro-enterprises.

The programme has also had an impact on health and nutrition by triggering an increase in food consumption by 8.3 per cent, contributing to improving the physical and mental development of children.

According to data produced by Wali, it has increased the purchasing rate for food such as fruit, poultry, fish and meat. Studies on the beneficiary families has also showed that children under the age of six in need of medical treatment have decreased by 3.7 per cent and “stunting and wasting has decreased at good rates” also.

On education, Wali said that 100 per cent of children whose families were part of the programme were enrolled in education at different grades. Child enrolment and commitment to school are stipulations for receiving the cash transfers.

The programme has also helped some beneficiaries of working age to find jobs through cooperation with NGOs and the private sector.

*A version of this article appears in print in the 24 October, 2019 edition of Al-Ahram Weekly.

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