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Vulnerability Analysis and Review of Food Subsidy in Egypt

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Vulnerability Analysis and Review of Food Subsidy in Egypt World Food Programme Arab Republic of Egypt Vulnerability Analysis and Review of Food Subsidy in Egypt WFP Egypt October 2005 Preface This work represents one of the most comprehensive and important studies ever carried out on the issues of vulnerability and food subsidies in Egypt. The main objective of the study was to analyze the relationship between two factors: household vulnerability to food insecurity and the existing food subsidy system. This comparison enables the Government of Egypt to identify the strengths and weaknesses in the existing food subsidy programme in order to make the system more efficient and effective. On the basis of this analysis, recommendations are proposed for improved targeting and alternative approaches for subsidy funding. The study used a sample of 13,200 households spread across 11 Governorates. This sample represents 65 percent of the entire population in Egypt and covers all of the major geographical regions including Upper, Middle and Lower Egypt, as well as the Metropolitan and Frontier Governorates. The study also allows for vulnerability comparisons between rural and urban areas. In addition to subsidized food, the study provides information on the other subsidized sectors such as energy, transportation, housing, education, health and social expenditure. The study looks at how these other subsidies are distributed across vulnerability categories to see if targeting can be improved. I would like to express my sincerest appreciation to the World Food Programme of the United Nations for their financial and technical support of this study. I especially wish to thank Mr. Bishow Parajuli, the WFP Representative and Country Director in Egypt, for his continuous support throughout all stages of this work, as well as his staff and consultants that helped carry out the study. I believe that the results of this study will go a long way to help the Government of Egypt improve the subsidy system to ensure that the allocation of targeted resources reach the most needy in the country. Dr. Hassan Khedr Minister of Supply and Internal Trade i Acknowledgements This evaluation of the government food subsidy programme would not have been possible without the support provided by the institutions and individuals that participated in this study. First, it is important to acknowledge that the evaluation was initiated based on the request from the Ministry of Supply and Internal Trade in the Government of Egypt . The Honorable Minister Dr. Hassan Khidr provided intellectual leadership, useful insights and was highly instrumental to the successful completion of this work. His staff namely, Mr Mohamoud Abdel Hamid, Deputy Chairman GASC and Amb. Adel Saleh, Sn. Advisor to the Minister and several young researchers at the Ministry provided excellent support and cooperation throughout the period of the exercise. We also wish to thank Mr. Stanlake Samkanga, Director of Policy, Programming and Strategy Division in WFP HQ, Rome, Mr. Khaled Adly and Mr. Amir Abdulla, former and current Regional Director for Eastern Europe, East Asia and the Middle East Region, WFP. These individuals gave back up and continuous encouragement to this project. Also thanks are due to Dr. Werner Kiene and Dr. Neville Ediresinghe, both former WFP staff, for their help in the initial design and guiding a way forward for the project. The WFP Country Director for Egypt (undersigned) coordinated and ensured cooperation among various partners and was instrumental in developing the institutional partnerships and overall coordination of the study. Dr. Abdulla Marzban, Senior Consultant and Mr. Ghassan Kaka, VAM expert, played an important role overseeing the details on the technical side and ensuring cooperation among various partners. Mr. Ayoub Aljaloudi, WFP Deputy Country Director provided various back up support on the project. The institutions that were responsible for collecting the survey data deserve valuable recognition. The Cairo Demographic Centre was mainly responsible for sampling, carrying out the survey and entering and cleaning the data. Special recognition is due to Dr. Maged Osman and Dr Abdul Ghani for their leadership in the sampling surveys and design. Dr. Soad and Dr. Frial played a key role in the training and field supervision and follow up. In addition, the National Nutrition Institute played a key role in collecting the anthropometric information for the study. Special thanks goes out to Dr. Ibrahim Ismaiel, who provided oversight and technical guidance on this component. Designing the study methodology and analysis of data was carried out with the support of TANGO International, by Mr. Richard Caldwell and Mr. Tim Frankenberger, who deserve special recognition for their excellent quality analysis and reporting. In addition, several other TANGO staff participated in the analysis. Special thanks are due to Lezlie Moriniere, Mark Langworthy, Jeanne Downen and many other support staff that worked for TANGO. Thanks are also due to DFID/UK for their continuous support to WFP under the Intuitional Support Grant, which helped to finance this work. Last but not least, special thanks are due to all of the Egyptian families who willingly gave up precious time to participate in this study. We hope that the results of this study will provide guidance to the Government to support the vulnerable in a more effective way. Bishow Parajuli WFP Representative and Country Director, Egypt ii Table of Contents Executive Summary.......................................................................................................................... vii Acronyms......................................................................................................................................... xiv I. Background and Objectives.......................................................................................................... 1 II. Methodology ................................................................................................................................ 2 III. Sampling ...................................................................................................................................... 3 A. Weighting....................................................................................................................................3 IV. Demographics and General Characteristics of the Survey Population........................................ 4 A. Vulnerability Categories .............................................................................................................4 B. Education.....................................................................................................................................6 C. Savings and Loans.......................................................................................................................9 D. Employment..............................................................................................................................11 E. Food Consumption and Child Nutrition....................................................................................23 V. Results on Food Subsidies .......................................................................................................... 29 A. Qualitative Results ....................................................................................................................29 B. Quantitative Results ..................................................................................................................34 VI. Other Subsidy Programmes ........................................................................................................ 45 A. Education Sector .......................................................................................................................46 B. Medical Subsidies .....................................................................................................................54 C. Subsidized Housing...................................................................................................................60 D. Subsidized Water ......................................................................................................................63 E. Subsidized Electricity................................................................................................................65 F. Social Assistance Programmes..................................................................................................67 VII. Results on Vulnerability and Nutrition Security ....................................................................... 69 A. Analysis of Nutrition Security ..................................................................................................69 B. Other Factors that Could Account for Differences in Nutritional Status..................................74 C. Comparing Egypt’s Malnutrition Rates with other Countries and Regions..............................76 VIII. Targeting Analysis ................................................................................................................... 77 A. Comparing Alternative Targeting Criteria................................................................................77 B. Vulnerability Ranking by Criteria.............................................................................................79 IX. Conclusions................................................................................................................................ 81 A.
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