Nearly 71% of Egyptians described their family income as insufficient for their needs and expenses, while 24% stated that their income does cover their needs, and only 3% said that they are able to save from their income, according to a survey conducted by The Egyptian Centre for Public Opinion Research (Baseera).
Egypt adopted an economic reform programme, which included floating the pound in November 2016, to control foreign exchange shortages that crippled trade and hindered investment. The move unleashed foreign investment into Egyptian treasury bills and bonds. However, the pound lost more than half of its value, which, in addition to the reduction of fuel and electricity subsidies, led to soaring inflation in a country where more than half the 95 million residents live at or near the poverty line.
According to a study conducted by the Egyptian Centre for Economic Studies (ECES), economic reforms increased the number of Egyptians who fall below the poverty line by 1.3 million, due to the fact that the minimum income for a family to be above the poverty line rose to EGP 4,820 from EGP 2,410 following the floatation.
On the other hand, only 7% of the population is covered by social solidarity programmes such as “Takaful” and “Karama”.
Currently, the Egyptian unemployment rate registers at around 11.9% of the total workforce or around 3.5l3 million unemployed Egyptians, according to official figures announced by the Central Agency for Public Mobilisation and Statistics (CAPMAS) in November.
Consequently, there was a draft law proposed in the parliament and approved by parliament’s suggestions and complaints committee, which suggested the formation of a sovereign wealth fund to support unemployed youth, and to disburse a monthly unemployment benefit of EGP1,200 for unemployed youth for a maximum of three years.
However, the Finance Ministry announced on Friday that the ministry does not have the funds required to finance such a fund. Deputy Minister of Finance for Social Insurance and Pensions Mohamed Moeit stressed that any proposed law that would increase financial burdens on the state should be accompanied by suggested funding sources in accordance with the constitution.