Egypt Considers Shift to Cash Subsidies Amid Economic Reform Talks
President Abdel Fattah al-Sisi’s forum is exploring the possibility of moving towards cash payments instead of traditional food subsidies, a move that could revolutionize Egypt’s economic landscape. The country currently spends billions on direct subsidies, with a significant portion allocated to food products. Critics argue that the current system is inefficient and fails to benefit the most vulnerable citizens.
The International Monetary Fund has also weighed in, suggesting that reducing untargeted subsidies could pave the way for better social protection and human capital development. The National Dialogue, initiated by Sisi in 2022, aims to foster policy debate and recommendations within the government’s framework.
While many of the forum’s suggestions have yet to be implemented, there are signs that the government is serious about subsidy reform. Experts believe that cash subsidies could be a more effective way to support those in need, provided that clear criteria and inflation linkage are established.
With a large portion of Egyptians living near or below the poverty line, the outcome of these discussions could have a significant impact on the country’s economic future. As prices continue to rise and the currency weakens, the need for targeted and sustainable subsidy programs becomes more pressing.