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Wednesday, 27 July 2022

1 mn more families to receive public support amid economic crisis

Another 1 million families will be brought into the Takaful and Karama social security program as part of the Sisi administration’s bid to protect vulnerable people against the rising cost of living, Ittihadiya said yesterday. This will bring the total number of people in the program to 20 mn.

This is more than we expected: In a televised address announcing the package of social protection measures earlier this month, Prime Minister Moustafa Madbouly said the program would expand to cover another 450k families.

About Takaful and Karama: The government launched the Takaful and Karama program in 2015, supported by USD 400 mn from the World Bank. The program provides income support to the country’s most vulnerable citizens via cash transfers.

The decision is part of an EGP 11 bn package aimed at mitigating the impact of the economic crisis on the poorest. It will also see emergency aid distributed for the coming six months to 9 mn families, people with pensions lower than EGP 2.5k a month, and public sector workers earning less than EGP 2.7k. Action to improve food security will see 2 mn cartons of subsidized commodities a month, targeting vulnerable families.

The breakdown: There are 1.6 mn (represented in 340k families) public sector workers earning less than a monthly EGP 2.7k, eligible for the state’s emergency aid and 5 mn families where the breadwinner is receiving a pension lower than EGP 2.5k a month and there are an additional 4 mn vulnerable families also eligible for aid.

DOMESTIC REAX- Trade Minister Nevine Gamea used a call to Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 13:02) to break down the list of beneficiaries from the state’s six-month emergency aid program. The story dominated last night’s talkshows, as we note below.

Is tax relief still on the table? Madbouly said earlier this month that the government is planning to raise the personal income tax exemption threshold to EGP 2.5k from EGP 2k, taking many low earnings out of tax. Ittihadiya didn’t mention the plan in its statement yesterday.

Inflation has hit Egypt hard this year: Inflation has risen to three-year highs this year on the back of surging global food and energy prices caused by Russia’s war in Ukraine, and the devaluation of the EGP, which has seen the currency decline more than 20% against the USD. The result: A jump in the cost of everything from food and fuel to transport and consumer goods, piling pressure on household finances.

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