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Tuesday, 14 January 2020

Get House approval before making subsidies changes, Abdel Aal tells gov’t

Abdel Aal reminds gov’t switching to cash food subsidies needs House approval: The Supply Ministry’s plans must earn a stamp of approval from the House of Representatives, Ahram Online reported House Speaker Ali Abdel Aal as saying yesterday. Abdel Aal wagged his finger at Supply Minister Ali El Moselhy for making a “public statement” on the proposed switch, which the speaker said is “provocative” for citizens under economic pressure. El Moselhy hasn’t said when the government plans to make the switch, but Giza Chamber of Commerce board member Osama El Rifai told Al Shorouk it could happen within two months.

The new system would save 30-35% of the subsidies bill in its first year (EGP 26.5 bn), rising to 40% in the second year, the newspaper says, citing unnamed sources from the ministry and the chamber of commerce. The sources also say the government is mulling increasing each beneficiary’s monthly allowance to EGP 200, from EGP 140 currently.

Background: A number of entities are being consulted by authorities to study the feasibility of the move, and there’s a proposal on the table to launch the system on a trial basis in one of the country’s governorates. The supply and finance ministries were in talks last summer over the planned shift, which would result in a new system that would see subsidy recipients receiving cash handouts, rather than points on their ration cards with which to purchase bread.

The Cash Subsidies Act, under which this new system would be governed, was sent to the House of Representatives back in July 2019. Nivine Kabbag mentioned the legislation when she was sworn in as the new social solidarity minister as one of the items on her agenda.

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