File Photo: a marketplace in Cairo. World Bank.
The report, titled "Built to Include: Reimagining Social Protection in the Middle East and North Africa," sheds light on key factors that impact people's economic conditions in MENA.
Egypt is among the few countries in the region that has built a shock-responsive system to deliver income support to the poor, the report said.
Assistance to the poor
The report showed that Egypt, alongside Jordan, are the only countries in the MENA region whose cash transfer programmes cover most of the poor.
"Egypt and Jordan are good examples of countries that have increased coverage to more than half of the poorest 20 percent of their populations through a combination of increased funding, better targeting of the poor, and consolidation of programmes into a single cost-effective cash transfer programme (Takaful and Karama Programme in Egypt)."
The Takaful and Karama Programme was launched in 2015 to support impoverished families with school-age children, the elderly and people with special needs in Upper Egypt.
Egypt announced that the budget for subsidy and social protection networks would increase from EGP 358.4 billion in FY2022/2023 to EGP 529.7 billion (around $17.1 billion) in FY2023/2024, an increase of 48.8 percent.
Government assistance benefits 25 percent of the poorest households in Egypt and the country's social protection registries cover more than 50 percent of the population, the report said.
The WB report stated that Egypt's food subsidy program is the largest in MENA. The bread subsidy programme alone serves 72 million citizens, while the food ration cards cover more than 64 million people.
The report noted that the food subsidy program has a larger impact than any programme, including Takaful and Karama. However, Takaful and Karama are more cost-effective, as many of food subsidies go to non-vulnerable households.
"It is estimated that Takaful and Karama are reaching up to five million households in 2023, making it the largest poverty-targeted conditional cash transfer in the Middle East and North Africa."
In Egypt around 68 percent of informal workers in 2012 were still informal through 2018, while 19 percent of them became unemployed or left the labour force, the World Bank report said.
Half of the informal wage workers in Egypt lost their jobs between February 2020 and February 2021 due to the COVID-19 pandemic, while the ramifications of the Ukrainian war pushed more people in the country into poverty, the WB report reveals.
The report claimed that at least two-thirds of private sector workers in MENA's middle-income countries, including Egypt, are working in informal jobs as employees in low-productivity micro-enterprises with fewer than 10 workers. Over 90 percent of Egyptian youth are working in informal jobs.
"Many informal wage workers in Egypt, Jordan, Tunisia, and the West Bank and Gaza live in households that are among the poorest 40 percent of the population." Private sector pension coverage is only 50 percent in Egypt, while there is no minimum wage protection in the sector, the report said.
"A child born today in a poor family in Egypt can only achieve 50 percent of his/her economic potential because of inadequate health and education investments," The World Bank report claimed.
The report noted that the job opportunities in the private sector for Egyptian university graduates have been declining over the past few decades, while informal jobs were increasing.
According to official statistics, the number of annual university graduates in Egypt reached 505,455 in 2021.