(Ecofin Agency) - In addition to agricultural support mechanisms, food subsidies are effective means to combat food insecurity worldwide. In Egypt, the food subsidy system is one of the most expensive in Africa.  

In Egypt, the executive has decided to allocate EGP128 billion ($4.1 billion) to cover food subsidies in the 2023/2024 fiscal year starting July 1, Reuters reports. The amount is down 12% compared to the $4.7 billion allocated to the same section the previous fiscal year. 

The announcement comes at a time when the prices of certain subsidized foodstuffs, namely vegetable oil, sugar, and rice, have been revised upwards by 20% due to the current dollar shortage in the country.

A subsidized 750 ml bottle of vegetable oil now costs 30 pounds ($0.97), compared with 25 pounds ($0.81) previously, while the price of 1 kg of sugar and rice has been increased from 10.5 pounds to 12.6 pounds ($0.34 to $0.41).

In March, when explaining the price adjustment, Supply Minister Ali Moselhy explained that owing to the lack of foreign currency, the government reduced the volume of some foodstuffs like wheat and vegetable oil to be imported. 

While details of the new budget's breakdown have not been revealed, it should be noted that in recent years, the bread subsidy program has accounted for up to 60% of the overall amount. Other staples subsidized by the executive include beef and chicken.

In Egypt, the food subsidy system benefits more than 60 million people, i.e. almost 57% of the population.

Stéphanas Assocle