Around 80 per cent of Egyptians receive food subsidies through the ration cards system. While the government increased the value of the food subsidies in the current fiscal year by nine per cent, it is also keen to find mechanisms to identify those who do not need these subsidies, eliminating them from a system currently covering 69 million Egyptians. It is also trying to make sure that newcomers to the system are those really in need of it. Minister of Supply Mohamed Ali Al-Sheikh said this week that people with incomes exceeding LE1,500 a month or pensions of LE1,200 will not be allowed to join the system. He denied reports that these conditions would be applied to existing cardholders. Last month, the government decided to put the armed forces in charge of clearing the ration card database of ineligible recipients. In April, it revealed a plan to exclude nine million people from the food subsidies, including the deceased, those who have been abroad for a long time, and those holding multiple ration cards on the same national ID. A conference sponsored by the Ministry of Planning this week shed light on the criteria to be used to determine if existing cardholders are eligible for the subsidies. The cardholder's annual income, ownership of a car or property, the kind and cost of any education he is enrolled in if he is still a student, and his electricity consumption bracket, as well as his mobile phone bill are all determinants of his eligibility to benefit from the subsidies, Magdi Al-Hennawi, head of the family card project affiliated to the Ministry of Planning, monitoring and administrative reform, said. If four of the above criteria show that the beneficiary is well off, he or she will be excluded from the system, Al-Hennawi told attendees of the conference. Niveen Kabaa, an assistant to the social solidarity minister and head of the cash-transfer plans Takaful and Karama, explained at the conference that if a cardholder had an annual income of LE10,000 or more, then one of the four conditions for being excluded was fulfilled. If three more conditions are applicable, like owning a car, or property, or having a high electricity bill, then the holder may also be excluded. If tuition fees at any level whether in school or at university exceed LE20,0000 per year, this could also be a valid reason to cancel the holder from the beneficiary database. Speakers at the conference said the Ministry of Planning aimed to introduce an electronic social security system to be implemented in four phases ending in 2019. The system will link the database of ration cardholders to their national ID cards. This will help update information like excluding the deceased from the database as soon as death certificates are released. It is estimated that his alone could save LE2.5 million a month as the procedure currently takes three or four months. “There must be procedures for people to appeal their exclusion as some of those in need might also be excluded,” commented Heba Al-Leithi, a professor of economics at Cairo University. The owners of cars could be eligible for food subsidies if their car is old, she explained. “We can't treat the owner of a brand-new car like someone whose car is 30 years ago,” Al-Leithi said. The accuracy of the information used should also be checked with the Ministry of the Interior database, something which the ministry is apparently currently refusing. The value of any property owned should also be verified by the tax authorities. Employees with a high annual income and reaching retirement age could see their monthly pensions drop to LE1, 200, and this means that there should be a “quick way to include these people in the system,” Al-Leithi said. A food subsidy system issuing people with smart cards entitling them to a monthly ration worth LE15 per individual and 150 loaves of bread was introduced in mid-2014. What is not purchased under the monthly ration can be transformed into points by which people can buy other products from ration vendors. The government increased the individual share of subsidised items by LE3 to LE18 in April this year, and then raised it to LE21 earlier this month after the floatation of the pound and the fuel subsidies cuts. Hania Al-Sholakami, a researcher at the Egyptian Centre for Economic and Social Rights, an NGO, and a member of the committee responsible for examining the ration cards database, said that any suggestion of reducing the number of people in the database should be examined before implementation. She noted that excluding students in private schools could be reconsidered, as some wealthy people pay for the education of children from poor families. She also stressed the need for an integrated social security system that did not only include ration cards. Beneficiaries of this system could have access to different kind of subsidies, including fuel subsidies and low-priced transport tickets as well as vocational training. According to the 2015 Income, Spending and Consumption Survey compiled by the Central Agency for Public Mobilisation and Statistics (CAPMAS), 88.6 per cent of people in Egypt are included in the ration cards system, increasing to 95 per cent in rural areas. The writer is a freelance journalist.
