Prime Minister: IMF welcomes Egypt’s social protection program, does not force the state to take measures that harm citizens

CAIRO – August 25, 2022: The International Monetary Fund (IMF) welcomes the government’s social protection programs and does not force the state to take measures that harm Egyptian citizens, Prime Minister Moustafa Madbouli said on Thursday.

There is no way to achieve economic reforms without the existence of a strong social protection programme, he added during a press conference held at the government headquarters in New El Alamein to announce the implementation of an additional social protection package within “Takaful and Karama”. “Cash support program.

The IMF welcomes the new social protection package, he said, criticizing the state of confusion that has dominated the Egyptian street over the details of an agreement with the IMF.

Negotiations with the IMF are confidential and cannot be revealed before reaching an agreement in this regard, he added.

He further reaffirmed that negotiations with the IMF began before the Russia-Ukraine crisis, saying that the program ended on June 30 and that new negotiations began after that.

Until the end of last year, the negotiations focused on the provision of technical support to help the State pursue economic reform programs and structural reforms in the various sectors, he said.

But after the Russian-Ukrainian crisis, Egypt decided to seek a new IMF loan with more technical support, he added.

Meanwhile, the prime minister said the all-commodities strategic reserve is “safe” and sufficient for seven months.

All basic commodities are available and will not be affected by the additional social protection package, he added.

Economic growth

Madbouli said economic indicators for the 2021-2022 financial year showed that the Egyptian economy had achieved a growth rate of 6.6%, one of the highest in recent years, despite the current global crisis.

The last quarter of the past financial year was really difficult due to the Russian-Ukrainian war and its effect on development rates, the prime minister said, noting that Egypt’s projected growth rate for the end of the year had been estimated at 6.2%.

Madbouli added that the unemployment rate in the country had stabilized at 7.2%, which he called an “encouraging figure”.

The real challenge for the state is the global phenomenon of high inflation rates, he said, revealing that inflation reached 14.6 percent in Egypt.

Family ration cards

A decision has been taken to add 100 EGP to family ration cards from September, Madbouli said.

This amount will be used in a number of commodities determined by the Ministry of Supply and Internal Trade, Madbouli added.

The number of ration cards that will be used by citizens stands at 8.11 million, covering a total of 9.1 million families, or more than 37 million individuals, he added.

The state will include about half a million families in the “Takaful and Karama” cash transfer program starting in September, Madbouli added.

The National Alliance for Civil Development Work (NACDW) will also provide cash assistance to around 420,000 families, he continued.

The total number of people who will receive the aid will be around 5 million, he noted.

The state will bear an additional EGP 3 billion as a result of this decision, the Prime Minister added.

The NACDW will additionally provide food subsidy to 180,000 families, he added.

The ‘Takaful and Karama’ conditional and unconditional cash transfer program is among Egypt’s largest investments in human capital development.

The name of the social safety net program translates to “Solidarity and Dignity” and was launched in 2015 with the support of a $400 million program from the World Bank.

The Takaful and Karama program is implemented by the Ministry of Social Solidarity and concerns millions of individuals.

Cash grant

Madbouli said nearly 5 million Egyptian families will benefit from a cash grant, adding that the exceptional social protection program announced by President Sisi will be implemented once the logistical measures are finalized.

Madbouli pointed out that the national economy is strong and capable of meeting any challenge, but overpopulation remains the biggest challenge facing the country.

This year, 2.185 million new births will be registered, he said, adding that it derails the government’s efforts to improve living standards.

He noted that people will start to feel the government’s tireless efforts for a better future if each family has only two children, as it will help to control population growth.

He said the economic growth rate will increase to 6.6 percent this year, driven by the 7.8 percent growth surge recorded in the first months of the year.

Meanwhile, Madbouli pointed out that the government had presented urgent legislation to parliament regarding the prohibition of child marriage, school dropouts and child labour.

Egypt Today contributed reporting.

Joel C. Hicks