Egypt is preparing to overhaul one of Africa’s largest food-support programmes, replacing fixed allocations of subsidised goods with cash-based assistance and widening the food basket available to about 60 million people.

Egypt plans to replace fixed food allocations with cash-based support for about 60 million people.The expanded programme will cover meat, milk, eggs, poultry, grains, lentils, beans and tea.The government says the change will give households more choice and reduce distribution losses.No implementation date, payment value or inflation-adjustment mechanism has been announced.

The expanded list will include meat, grains, tea, milk, lentils, eggs, beans and poultry, alongside staples such as cooking oil, sugar and pasta already available through the country’s ration-card system.

Egypt’s cabinet announced the plan on Wednesday as the government seeks to give households greater control over what they buy while reducing waste and losses in the distribution network.

Under the existing arrangement, each eligible person receives 50 Egyptian pounds, approximately $1, every month through a ration card. The allocation can be spent on a limited range of subsidised goods at state-approved outlets.

Supply and Internal Trade Minister Sherif Farouk said beneficiaries would receive the cash value of the goods rather than a fixed in-kind allocation, increasing their ability to choose products according to their household needs.

However, the government has not announced when the new system will begin, how much each recipient will receive or whether payments will be adjusted regularly to reflect changing food prices.

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It is also unclear whether the transition will begin nationally or through a pilot programme in selected areas.

Egypt’s politically sensitive subsidy overhaul

The planned change represents a major adjustment to a food-support system that has shaped Egypt’s social and economic policy for decades.

Egypt operates one of the world’s largest food-support systems, including a separate bread subsidy serving about 70 million people.[Gemini Generated Image]

Egypt’s ration-card programme covers more than half the country’s population. A separate subsidised bread scheme serves about 70 million people, making it one of the world’s largest programmes of its kind.

The government imports between four million and five million tonnes of wheat annually to support bread production. Egypt is among the world’s biggest wheat importers, leaving its food bill exposed to global prices, currency movements and disruptions affecting major exporters.

The cabinet’s latest announcement did not indicate that subsidised bread would immediately become part of the cash-transfer arrangement. That programme therefore remains separate unless the government provides further details.

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Prime Minister Mostafa Madbouly said previously that Egypt intended to begin moving from in-kind subsidies to cash transfers during the financial year ending in June 2027.

The government first publicly raised the transition several years ago, but its implementation has repeatedly been delayed. Food subsidies are politically sensitive in Egypt, where previous attempts to reduce support have faced strong public resistance.

Inflation presents a test for cash payments

The change is intended to address weaknesses in the current system, including limited consumer choice, distribution losses and the diversion of subsidised goods away from intended recipients.

Cash-based support may also reduce the government’s responsibility for purchasing, transporting and distributing a large number of individual products.

For households, however, its value will depend on whether payments keep pace with food inflation.

Egypt’s annual urban inflation increased to 14.9 per cent in July 2026, from 14.3 per cent in June, according to the country’s Central Agency for Public Mobilisation and Statistics. Urban food and beverage prices were eight per cent higher than a year earlier, although they declined slightly from June.

Egypt expands cash-based food subsidies for 60 million people.[Gemini Generated Image]

Without regular adjustments, a fixed cash payment can lose purchasing power when prices rise. In-kind subsidies offer some protection because the government absorbs part of the increase in the cost of the subsidised product.

Egypt has not yet explained how frequently it would revise the cash value or whether payments would be tied to the prices of the goods included in the programme.

That decision will be central to whether the reform gives households more meaningful choice or simply transfers more price risk to consumers.

Government increases food-support budget

Egypt has set aside 175.3 billion Egyptian pounds, approximately $3.5 billion, for subsidised food commodities in its 2026/27 budget.

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The allocation is 10 per cent higher than the previous year, according to the Ministry of Finance, and forms part of 832.3 billion Egyptian pounds, about $16.4 billion, budgeted for subsidies and social-protection programmes.

A further 55.3 billion Egyptian pounds has been allocated to programmes including Takaful and Karama, Egypt’s targeted cash-transfer scheme for vulnerable households. That programme supports approximately 4.7 million families, representing about 17 million people.

The government also provided an exceptional food grant earlier in 2026. About 10 million eligible ration cards, covering nearly 25 million people, received an additional 400 Egyptian pounds monthly for two months.

The temporary assistance allowed households to choose from products including sugar, rice, cooking oil and pasta.

That experience may provide the government with a model for the wider transition, although the permanent scheme would be significantly larger.

Economic reforms meet household pressure

Egypt’s subsidy overhaul comes as the government tries to reduce fiscal pressures while protecting households from the effects of economic reforms.

The country is implementing an $8 billion programme with the International Monetary Fund, under which it has adopted a more flexible exchange rate and pursued measures to control public spending.

Egypt’s currency depreciation has raised the local cost of imported wheat, fuel and other commodities. Although inflation has fallen sharply from its record levels in 2023, prices remain high for many households.

The government argues that directing support more accurately will ensure that assistance reaches those who need it while reducing administrative inefficiencies.

Yet the programme’s success will ultimately depend on the size of the payments, how beneficiaries are selected, how quickly allocations respond to inflation and whether cash support can preserve access to essential food.