President Sisi directs new EGP 180 bln social protection package to millions of citizens

Ahram Online , Wednesday 7 Feb 2024

President Abdel-Fattah El-Sisi directed on Wednesday the government to take several urgent social measures to alleviate the cost of living pressures on citizens, including raising minimum wages for all government workers and raising pensions starting in March.

President Sisi

 

El-Sisi's directives came during a meeting between President El-Sisi, PM Mostafa Madbouly, and Minister of Finance Mohamed Maiit.

The President was briefed during the meeting on the government’s measures to control the prices of goods and services in the markets, reduce inflation, and achieve stability at the macroeconomic level.

El-Sisi directed the government to contain the repercussions of external and domestic economic crises.

The presidential decree stipulates raising all salaries for government employees by 50 percent at a minimum of EGP 1,000 to EGP 1,200 to reach EGP 6,000.

The minimum wage for government employees was last raised in September 2023 from EGP 3,500 to EGP 4,000.

Meanwhile, the social package allocates EGP 15 billion for increasing the salaries of doctors, nurses, teachers, and university faculty.

In addition, El-Sisi issued instructions that EGP 4.5 billion be allocated to increasing the wages of medical professionals and nursing staff, whereby the risk allowance for medical professionals was increased by EGP 250 to EGP 300. Similarly, the allowance for night and overnight shifts increased by 100 percent.

El-Sisi further instructed the government to allocate another EGP 6 billion to hire 120,000 new doctors, nurses, teachers, and workers in other administrative bodies. 

In addition, the social package includes a 15 percent increase in pensions for 13 million citizens at EGP 74 billion.

It also includes a 15 percent increase in "Takaful and Karama" pensions at the cost of EGP 5.5 billion in FY2023/2024.

Moreover, an additional EGP 41 billion will be allocated within the package to "Takaful and Karama" pensions for FY2024/2025.

Furthermore, the social package includes raising the income tax exemption for all state employees in the government, public, and private sectors by 33 percent, from EGP 45,000 up to EGP 60,000, at an annual cost of EGP 5 billion

Egypt has been facing economic difficulties and shortages in foreign currency since February 2022 because of disruptions in global supply chains resulting from the Russian-Ukrainian war.

Egypt's annual headline inflation decelerated to 35.2 percent in December, down from 36.4 percent in November, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

However, the inflation rate in December remains significantly higher than the 21.9 percent recorded in December 2022.

The Central Bank of Egypt (CBE) aims to keep inflation within seven percent (±2 percent) until the end of 2024.

Shortly after the announcement of the broad social protection package, informed sources refuted rumours that the increase in wages and pensions was a prelude to a new devaluation of the Egyptian pound, according to Extra News

Since March 2022, Egypt has devalued its currency on three separate occasions, resulting in a depreciation of around 70 percent for the pound against the US dollar.

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