Egypt prepares to change its food subsidy system. Instead of giving people specific rationed goods, the government plans to switch to cash payments that families can spend as they wish. The new system could begin with the 2026-2027 fiscal year, which starts next month, according to Prime Minister Moustafa Madbouli. The idea is to give eligible families cash, instead of fixed food items, allowing them to choose what they need most in the light of their own priorities. The plan will sort people by income levels. The government also wants to combine the current databases for subsidised bread and other food items. Currently, around 72 million Egyptians benefit from bread subsidies, while about 64 million receive other subsidised food commodities. This shift comes as the government increases the money set aside for subsidies. The budget for the current year (2025/26) rose to EGP160 billion, and the draft budget for 2026/2027 has allocated EGP178.3 billion for food subsidies. Under the existing system, each registered person gets EGP50 to buy subsidised goods at special outlets. The proposed change has sparked debate among economists. Banking expert Sahar el-Damati called on the government to regularly adjust the cash amount to match rising prices and inflation so that families do not lose purchasing power. She added that officials should clearly explain how the new system will work, especially regarding subsidised bread, how the cash will be paid, and how much each family will receive. “Protecting the poorest families,” she told The Egyptian Gazette, “must be the top priority.” Rashad Abdo, an economics professor from Helwan University, supports moving away from the old in-kind system. However, he stressed to this newspaper the importance of building accurate databases to make sure the money reaches those who truly need it and does not go to people who do not. Minister of Supply and Internal Trade Sherif Farouk said the cash subsidies issue has been under discussion for nearly a year. He noted that most economists and MPs are open to the idea as long as the aid goes to the right people. Farouk assured that the cash amount will be calculated to give families the same buying power they currently have for basic items like oil, sugar, and pasta. The new system will also expand the range of goods from 33 items to as many as 80, including rice, cheese, milk, tuna, lentils, beans, detergents, meat, and poultry. One of the biggest changes is flexibility. Families will be able to buy whatever they need without quantity limits. For example, if a family receives EGP500 or more (depending on its size), they can choose how much of each item to buy, unlike now, where someone might be limited to one kilo of sugar or one bottle of cooking oil. The government says full details will be announced once the final studies are complete. The post End of ration card era looming as cash aid plan emerges appeared first on Egyptian Gazette.
