The government's new smartcard bread subsidy system is set to be implemented in Cairo next, after having been put in place in Port Said, Ismailia and Suez governorates, Minister of Supply and Internal Trade Khaled Hanafy announced Sunday. The announcement was made on the sidelines of a Sunday conference organised by the Middle East and North Africa's Organisation for Economic Cooperation and Development (OECD) to discuss the business climate reforms in Egypt. Hanafy mentioned that he would meet with Cairo's governor on Monday to discuss the procedures of implementing the system, such as the logistics of bakeries and distribution networks. The supply ministry launched the smartcard subsidy system in March, which Hanafy said would provide high quality subsidised bread at five piastres a loaf. Under the new system, the ministry will provide a maximum of 150 loaves for each citizen per month. In March, Hanafy described Egypt's bread system as a "failure", noting that it has wasted between 20% and 25% of the state's bread subsidies budget. The old system allowed bakery owners to smuggle flour and sell it on the black market at higher prices, according to Hanafy. In an effort to control rising prices, Hanafy said in early May the ministry would cut prices of food commodities by 30% over the next three months. These goods include poultry, meat, vegetables and fruits. With regard to wheat supplies, Hanafy said Egypt would not start importing wheat until July. He announced in April that wheat quantities are at the safe levels and will be sufficient until mid-June. During his speech in the Sunday conference, Hanafy said that the government is currently working on restoring the confidence of investors despite the challenges it faces, such as a low growth rate, high inflation rates, increasing the internal debt, high budget deficit, high unemployment rate and dwindling foreign reserves.
