Egypt’s draft 2026/2027 budget allocates about 200 billion Egyptian pounds ($4 billion) to subsidize rationed food commodities, a senior source at Egypt’s Ministry of Finance told Al Manassa.
The source said the new plan would give citizens registered in the ration-card system more freedom to choose what goods they buy in exchange for the subsidy’s value.
Ration subsidies totaled 160 billion pounds ($3.2 billion) in the current fiscal year, including a cash subsidy for registered ration-card holders worth 50 pounds (around $1) per person per month. But the subsidy can only be used to buy goods sold through retail outlets affiliated with the Ministry of Supply, many of which are produced by the ministry’s state-owned holding company for food industries, which also squeezes its profit margins to supply rationed goods at a lower cost.
“The government is moving to shift the ration subsidy system from in-kind support to cash support starting with the new state budget for fiscal year 2026/2027, to give citizens greater freedom to choose the goods that fit their needs from consumer complexes and Ministry of Supply outlets across all governorates,” the source added, requesting anonymity.
The source did not say whether prices of rationed goods would be liberalized under the new system, or whether a wide gap would remain between subsidized prices and market prices.
Bread remains the biggest share
The source said most of the ration-subsidy allocation would still be directed to subsidizing bread, estimating bread support could reach about 130 billion pounds in the new budget as the state seeks to keep subsidized bread available at affordable prices.
According to the source, the shift from in-kind to cash support is mainly intended to ensure subsidies reach those eligible, especially in Upper Egypt, where many citizens prefer not to receive certain rationed goods such as rice and pasta and instead receive flour.
The source said the government held broad community dialogue in recent months on mechanisms for shifting from in-kind to cash support, and that the issue was also discussed in sessions of the National Dialogue, whose board of trustees held several meetings to examine the potential repercussions. Most recommendations from those discussions were taken into account, he added.
