Happening in Egypt: suspension of ration cards as punishment

You may get deprived of subsidised bread, flour, beans, lentils, cooking oil, sugar and pasta, with no prior notice. It is part of a new form of punishment and abuse against Egyptians, who are suffering from severe deterioration in living and economic conditions under the rule of President Abdel Fattah Al-Sisi.

Ration cards are one of the most important documents that allow Egyptians to get goods and food commodities at reduced prices. Losing this card or having it suspended means more suffering for people living in a country with a poverty rate of 32.5 per cent as of 2022, according to World Bank data.

More than two-thirds of Egyptians, whose population is about 110 million people, benefit from food subsidies, with about 70 million benefitting from bread subsidies, 62 million of whom also benefit from food subsidies.

The government grants people 50 pounds (about one dollar) per person per month, with a total of 200 pounds (about 4 dollars) per card for a family of 4 people. Families with more than 4 members receive 25 pounds (half a dollar) for each additional person. The government also provides subsidised bread at a rate of 5 loaves per person, per day, at a value of 20 piasters (1.2 cents) per loaf.

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Suspension lists

Under new requirements, the Egyptian authorities, represented by the Ministry of Supply, have removed thousands from the support system, which includes about 62 million people, according to the state’s general budget.

The Egyptian government often does not disclose the number of people removed from support programs, but relevant ministries have begun to deliver lists of names of people whose ration cards are likely to be suspended.

According to a government source in the Ministry of Supply who spoke to Middle East Monitor, on the condition of anonymity, people who steal electricity, against whom official reports have been filed, had their cards suspended, thus, they will not receive any support. He stressed that the process of removing those who are not eligible is ongoing.

The Ministry of Electricity had handed over to the relevant authorities lists of about 500,000 people against whom reports of electricity theft were issued, in preparation for their removal from the food subsidy program, according to local newspapers.

Similarly, other ministries such as the Ministry of Interior, the Ministry of Agriculture and the Ministry of Local Development have conducted a census and prepared lists of thousands of people who own a modern car, have farmland or against who reports of building on farmland have been filed. This step was done in preparation for removing them from the food subsidy program.

Social media outlets are talking about other conditions that call for suspending ration cards. These conditions include people receiving a salary of more than 10,000 pounds ($200) a month, paying tuition fees of more than 20,000 pounds (about $400) a year, paying taxes of more than 100,000 pounds (about $2,000), owning agricultural holdings, having more than one property, or owning a modern car. The card can also be suspended if the cardholder is abroad, or if he/she does not use the card for 6 months.

Mohamed Sayed, a private sector employee, says that as soon as he bought a used car, with a make year of 2021, and registered it with the motor vehicle department, his ration card was suspended without prior notice. He adds that he is in favour of rationing support, but through transparent controls and standards that apply to everyone.

Several areas in Egypt witnessed some arguments between cardholders and bakery owners after ration cards were flagged as suspended during transactions. This was reported by a source in the General Division of Bakeries at the Federation of Chambers of Commerce, who spoke to Mada Masr website.

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In addition, no newborns have been added to ration cards since 2008, meaning that kids who are sixteen years of age now do not get assistance, despite Prime Minister Mostafa Madbouly’s promise to allow registration of newborns as of 2018, but this has not happened yet.

Distribution of support

Budget allocated for the food subsidy program for the current fiscal year 2024/2025 is about 635.9 billion pounds ($13.5 billion), but there are government fallacies regarding this figure. The first fallacy is that, of that amount, 214.2 billion pounds ($4.49 billion) are the annual instalment paid by the General Treasury to the Social Insurance Authority, which means it is an instalment for a debt owed by the General Treasury and not support given directly to people. The Ministry of Finance, however, added it to make the amount allocated for support seem bigger, according to the economic expert and former head of the Egyptian Journalists Syndicate, Mamdouh Al-Wali.

The fiscal year in Egypt begins in early July and ends at the end of June of each year, according to the Egyptian budget law.

The second fallacy, according to Al-Wali, is that the government says the subsidy program budget is about 16.4 per cent of the total budget expenditure, putting it at the largest component within the 6 components of expenditure. The correct percentage, however, considering there are 8 components of expenditure, and including the debt instalment, is 11.5 per cent only.

Meanwhile, the percentage of food subsidies provided to Egyptians is 2.4 per cent of the total spending in the general budget of 5.5 trillion pounds ($106.9 billion), at 134 billion pounds (about 2.7 billion dollars). This sum is distributed as 90.8 billion pounds (more than 1.8 billion dollars) for bread, 5.2 billion pounds (about 106 million dollars) for flour, 2 billion pounds (about 42 million dollars) for bread points when replacing bread with other goods, and 36.1 billion pounds (more than 740 million dollars) for ration cards, according to data from the Egyptian Ministry of Finance.

Collective Punishment

Despite the decline in support allocations, the Egyptian government is considering cancelling in-kind support in two stages, starting in July 2025, and converting it to cash support, with a significant reduction in the number of beneficiaries, through applying strict conditions.

The new conditions are related to how much the electric and internet bills are, the number of mobile phones in each family, and if a household has an air conditioner, which are conditions the Egyptian Cabinet denied using.

A government employee, who requested anonymity, commented, saying: “Denial is a recurring government habit that does not ease the concerns of the people; because the authorities often deny and then do what they want, which is what happened with bread prices.”

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The Egyptian government had raised the price of subsidised bread from 5 piasters (0.3 cents) to 20 piasters (1.2 cents) per loaf, a 300 increase, in early June, with the aim of lowering the subsidy bill and saving about 13.5 billion pounds ($275 million).

The International Monetary Fund is calling on the Egyptian government to adopt a flexible exchange rate system, sell government assets, cancel subsidies for electricity, fuel and food, and implement cash subsidies, while increasing spending on social safety net programs to protect the groups most affected by rising prices.

In this context, government plans include removing 40 million people from ration cards, which reduces the number of eligible people from 62 to 20 million people. It will also reduce the number of beneficiaries of bread support from 70 million to 30 million by 2026.

Opponents say that most of those excluded from support are poor, or people living in popular and rural areas, which are population centres in need of support, especially with the rise in inflation to 26.4 per cent as of September. The government, however, says that the support does not reach those who deserve it.

The proposed cash support program’s rules stipulate that a family of two receives 500 pounds ($10) per month. This amount will increase to 750 pounds ($15) for a family of three, and to 1,250 pounds ($25) for a family of four. Additional members to the families will not receive any support, meaning that a third child to Egyptian parents will not receive any support from the state.

Egyptian journalist, Lamis El-Hadidi, had said earlier that she refuses the penalty of being deprived of the ration and bread card, stressing through her program, a Final Word, on ON satellite channel, that depriving one member is a punishment for the entire family, and it comes at a difficult time.

In addition to getting deprived of the ration and bread card, Egyptians suffer the consequences of other government policies. Sums allocated to ration cards have been fixed since 2017, some basic commodities such as rice have been removed from ration cards, and prices of other commodities such as sugar, oil, etc., have been increased which reduces the quantities individuals receive, and adds to people’s burdens.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.