Egypt and World Bank sign $400 mn deal for two Egyptian social schemes

Ahram Online , Saturday 18 Apr 2015

Takaful (Solidarity) and Karama (Dignity) target impoverished families to help with youth education and the elderly respectively

World Bank
World Bank (Photo: Reuters)

Egypt signed with the World Bank Friday a $400 million agreement for a project set to benefit 1.5 million poor Egyptian families.

Earlier this year, Egypt's government established conditional cash transfer projects called "Takaful and Karama" (Solidarity and Dignity).

Takaful targets poor families with children younger than 18 to send them to schools, while Karama targets the elderly and the disabled, so long as they can't earn their living, according to the state TV online website.

Impoverished Upper Egypt is expected to benefit from the project that will insure children get access to education and healthcare, said Afrah Alawi Al-Ahmadi, World Bank senior social protection specialist and project team leader.

With staggering poverty rates reaching 26 percent of the population, Egypt remains one of the top 20 countries suffering from the prevalence of chronic malnutrition with a third of its children under the age of five stunted. In addition, at least quarter of children don't enroll in basic education and up to half of them do not access secondary schools.

Takaful pays each family LE325 in addition to LE60-LE100 per child on a monthly basis, while Karama pays each elderly or disabled person LE350 per month.

However, inflation in Egypt has been accelerating, reaching 11.8 percent in March, the highest since the government cut fuel subsidies, raising prices up to 78 percent at the pump.

Both Egypt's education and healthcare systems are rundown after years of negligence, conditions the government aims to improve by liberalising these sectors, raising concerns among some of further price hikes.

The World Bank believes the Talaful and Karama projects will "improve the targeting of the social safety net system, which is a critical element to accompany any reforms,” said Hafez Ghanem, the Bank's regional vice president for the Middle East and North Africa.

The World Bank currently has 26 projects underway in Egypt at a value of $5.4 billion.

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