Egypt is considering replacing a popular bread subsidy with cash payments for the poor to protect the budget from soaring global wheat prices, but domestic inflation and a history of protests could make the government opt for a less ambitious reform.
Under the existing program, over 60 million Egyptians, or nearly two thirds of the population, get 5 loaves of round bread daily for 50 cents a month. The handout is a lifeline to the poor, but is widely criticized as wasteful.
High global prices for wheat, which Egypt imports on a vast scale, led President Abdel Fattah al-Sisi to say last year that it was time to tackle the bread subsidy.
Ali Moselhy, the minister in charge of subsidies, told Newsmen that inflation, which has climbed in recent months to 6% from 4% earlier in 2021, made it harder to replace the support for bread and other food with cash handouts.
Moselhy has said he personally favours giving people money specifically to buy bread. Eligible Egyptians already get a monthly $3.20 voucher for other subsidised food.
However, he said a broader idea to introduce unconditional payments, favoured by many economists as the most efficient welfare system, risked driving up prices by putting more cash into circulation at a time of rising inflation.
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