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Monday, 6 February 2017

1.2 mn Kramers purged as cabinet looks to make further moves on subsidies:

1.2 mn Kramers purged as cabinet looks to make further moves on subsidies: Some 1.2 mn welfare cheats have lost access to state food subsidies rolls in phase one of a purge of the nation’s welfare rolls. The names removed were dead, duplicates and individuals living abroad, said Supply Minister Mohamed Ali El Sheikh. Phase two of the purge will begin once a joint cabinet committee finishes laying out eligibility guidelines for food subsidies, the minister said.Statements attributed to El Sheikh last month had put the target for the initial phase of the Kramer purge at 14 mn, which would make this a sharp decline. Sources from the supply ministry had expected phase two to cut 40 mn, the highest target announced to date.

The timing of the announcement comes as the government is expected to announce further subsidy cuts during the visit this week of an IMF committee. The move is designed to show progress on the Ismail government’s reform program as Egypt asks the fund to hand over the second payment under an IMF facility. Ittihadiya stressed yesterday that electricity subsidies will cost state coffers some EGP 65 bn, up from a budgeted EGP 30 bn this fiscal year, in a statement following a meeting between President Abdel Fattah El Sisi and Electricity Minister Mohamed Shaker. This could be seen as a precursor to an announcement on that front. Last week’s price hikes of subsidized goods was met with backlash, particularly from the House of Representatives, adding pressure to the government already stuck between a rock (popular unrest) and a hard place (IMF conditions).

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