Austerity-hit Egypt restricts access to food rations

Austerity-hit Egypt restricts access to food rations
Austerity-hit Egypt has moved to cut the number of people eligible to receive subsidised food and fuel in a bid to curb Cairo's financial struggles.
2 min read
10 August, 2017
Some 70 million people in Egypt rely on subsidised food and fuel [Getty]
Austerity-stricken Egypt has tightened access to a food rations programme which millions of the country's population are reliant on.

The move is the latest in a series of painful and politically sensitive measures to repair public finances and investor confidence.

The decree unveiled on Tuesday restricts access to new ration cards to people earning 1,200 pounds ($67.50) a month or less, down from 1,500 pounds, leaving 19 million people ineligible.

Lower caps apply to other segments of the population, including pensioners, the Supply Ministry said in a statement.

The number of family members covered under each card was set at four – with no option to add additional names after the card is issued.

The cards allow 70 million people in Egypt to buy bread, children's milk, oil, cooking gas and fuel at a discounted price, with the government making up the shortfall.

The new measures do not affect people who already hold food ration cards, which subsidise goods for more than 75 percent of the nation's 93 million residents.

The move is the latest effort by the state to cut spending and curb subsidies as its pushes ahead with International Monetary Fund-backed measures to boost growth and attract investment, which dried up following the 2011 uprising against former President Hosni Mubarak.

The government forecasts the budget deficit to fall 1.4 percent to about 9.1 percent of gross domestic product this fiscal year.

This year's budget includes almost $2.5 billion in tax cuts, bonuses and increased pension payments – funds aimed at offsetting the impact of rising prices.

Inflation has soared above 30 percent since the pound was floated in November, further burdening a nation where nearly half of the population lives near or below the poverty line.

Prices have rocketed on basic commodities – from bread, to petrol, to metro tickets.

Egypt's devalued currency has also made imported items such as cars considerably more expensive.

President Abdel-Fattah al-Sisi has urged Egyptians to be patient with the reform process, but discontent simmers over the government's austerity tactics.

Last month the strongman opened a big-budget military base, one of the largest in the region, despite Cairo's financial struggles.

Although the budget for the armed forces is a closely kept secret, Egypt's intervention in neighbouring Libya, the purchase of fighter jets, and the ongoing battle against a bloody insurgency in the Sinai, military spending is likely to be high.