Emmanuel OchayiEgypt’s Finance Minister, Mohamed Mait, announced an allocation of $2.66 billion for bread subsidies and $3.13 billion for petroleum products subsidies in the country’s upcoming 2024/2025 Budget.
“Bread and fuel are essential for our citizens. We are committed to ensuring their accessibility despite economic challenges,” stated Minister Mait.
Egypt, known as one of the world’s largest wheat importers, faces significant economic strains, including foreign currency shortages and budget deficits. With a population of 105 million, the subsidy program directly benefits approximately 60 million Egyptians, offering subsidized prices for staple foods like bread, rice, and sugar.
“The subsidy program is vital for maintaining social stability and ensuring necessities are affordable for our people,” Minister Mait emphasized.
In addition to subsidies, Egypt plans to allocate a total of $12.67 billion for social protection programs, with a significant portion dedicated to food subsidies, as Minister Mait outlined.
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The decision to increase petroleum subsidies stems from both global oil price hikes and fluctuations in foreign exchange rates, according to the finance minister. Egypt recently allowed its pound to depreciate to around 47 pounds per dollar and raised key interest rates by 600 basis points in response to economic challenges.
Despite these measures, the Egyptian pound remains fixed at approximately 31 pounds to the dollar for the next 12 months.
Looking ahead, Egypt’s total expenditure for the upcoming fiscal year, starting July 1st, is projected to reach 3.9 trillion pounds ($82.89 billion), with expected revenues of 2.6 trillion pounds.
“We are striving to strike a balance between meeting our citizens’ needs and maintaining fiscal responsibility,” Minister Mait affirmed.
The substantial allocation for subsidies underscores Egypt’s commitment to prioritizing the welfare of its citizens amid economic pressures, reflecting a strategic approach to addressing socio-economic challenges in the country.
