Editorial: In favour of the poor

Al-Ahram Weekly Editorial
Thursday 21 Sep 2023

This week President Abdel-Fattah Al-Sisi announced a bundle of measures aimed at mitigating the negative impact of the economic crisis on poor and low income classes.


Widely hailed in political and economic circles as a positive step, the decision is seen by analysts and observers as crucially timed since the inflation rate surged to more than 40 per cent in August, affecting millions of Egyptians.

The measures include raising the monthly pension of the Takaful and Karama cash transfer programme, which serves five million households, by 15 per cent. The president also ordered doubling the monthly “cost of living bonus” for pensioners, who number 11 million citizens, to LE 600 instead of LE 300.

The same allowance granted employees of the state’s administrative apparatus, economic institutions, business sector companies, and the public sector, will also be raised to LE 600 from LE 300. He also raised the minimum gross income to LE 4,000 ($129) from LE 3,500 for all employees of the state’s administrative apparatus and economic institutions.

The president also raised the income tax exemption limit to LE 45,000 from LE 36,000, which means that more people will be exempted from paying income tax.

This is the second time this year that Al-Sisi has sought to ease the burden on low income classes, small farmers and defaulters and increase the income and benefits of public sector workers and pensioners. In July, he instructed the government to raise the tax exemption limit from LE 24,000 to LE 36,000 as of the beginning of the fiscal year in July.

Al-Sisi also instructed the Agricultural Bank of Egypt to launch an initiative to help small farmers and defaulters who are in trouble with the bank before January 2022. He also ordered exempting defaulters from paying interest and fines for delayed payment of installments due to the General Authority for Reconstruction and Agricultural Development Projects, no later than the end of 2024.

The decisions were announced during the president’s visit to Sods Al-Umraa village in the Upper Egypt governorate of Beni Sueif, which is one of the villages included in the Decent Life initiative aiming to improve quality of life in rural areas.

President Al-Sisi’s new social support measures, which will cost an estimated LE 60 billion annually, will be sent to the House of Representatives for deliberation and approval once MPs return from the summer recess in the first week of October.

Two crises have hit Egypt’s finances since 2019, leaving the vulnerable classes suffering the most. First Covid-19 forced the government to accept a loan from the IMF to cover the costs the pandemic incurred by disrupting international food supply chains, then came the Russia-Ukraine war which erupted in February 2022 and left the economies of many countries around the world reeling. Egypt was severely hit by the war in Ukraine.

The war added fuel to the fire and caused inflation to skyrocket. The latest figures show inflation accelerating at a record pace in August on the back of ballooning food prices. The urban rate of inflation rose to 37.4 per cent, from 36.5 per cent the month before, because of escalating food and beverage prices.

The decision reflects the state’s bias in favour of vulnerable households and the president’s personal keenness to improve the daily life of millions of Egyptians.

* A version of this article appears in print in the 21 September, 2023 edition of Al-Ahram Weekly

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