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Egypt and World Bank discuss activating $500m food security agreement

A customer pays at a market in Cairo, Egypt on 1 June 2022 [Islam Safwat/Bloomberg/Getty Images]
A customer pays at a market in Cairo, Egypt on 1 June 2022 [Islam Safwat/Bloomberg/Getty Images]

Egypt and the World Bank are discussing activating a $500 million food security agreement to help tide the country over as it struggles to deal with the repercussions of the Russian invasion of Ukraine.

Russia and Ukraine are the largest wheat exporters worldwide and because of the war, prices have skyrocketed particularly in the MENA region.

According to Reuters, Egypt ordered five cargoes of wheat for between $346 and $360 per tonne in December, which went up to $494.25 per tonne in April.

Egypt is the world's biggest wheat importer, with 80 per cent of its supply coming from Russia and Ukraine.

According to the state-run Al-Ahram, World Bank delegates and ministers discussed strengthening food security in Egypt and doing more to combat climate change.

In June the board of executive directors of the World Bank approved a $500 million loan to bolster Egypt's efforts to provide bread to poor households and to support reforms in food security policies.

One month into the Russian invasion Egypt fixed the price of unsubsidised bread as wheat prices soared around the world and the price of bread increased by up to a quarter.

READ: Egypt: Price of eggs continues to hike

The government had planned to cut the bread subsidy at the end of March before the further hardship caused by the Russia-Ukraine war.

One in three Egyptians live below the poverty line and have been hit hard over recent years, first by the global coronavirus pandemic and now the war. Experts have predicted this is set to get a lot worse.

Corruption has also played a large part in Egypt's economic decline, with money being poured into vanity projects like the new capital city rather than a social welfare system.

The debt-to GDP ratio is 93.8 per cent, according to Egypt's former investment minister, with 54 per cent of the state's budget being spent on loan and interest repayments.

Categories
AfricaEgyptEurope & RussiaInternational OrganisationsNewsRussiaUkraineWorld Bank
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