The Tamween (‘Supply’) system, a subsidized goods distribution network operating through ration cards, has served as a cornerstone of Egypt’s welfare state since the early 1960s. Beyond representing the largest share of subsidies provided to Egyptians, it aimed to ideally offer a concrete and direct means of state support to the broader population.
To address the needs of the poorest and most vulnerable Egyptians, the government introduced Takaful and Karama (Solidarity and Dignity) in 2015. Touted as the first modern cash transfer system in the country, the program provides monthly cash transfers of 350 EGP (approximately 40 USD) per person.
The Tamween system and Takaful we Karama operated concurrently, with the former continuing to provide universal subsidies and the latter offering targeted support to the most vulnerable populations. Over time, both programs faced inflationary vulnerabilities, as the purchasing power of cash transfers diminished with rising prices, highlighting the challenges of transitioning to cash-based welfare systems.
This study will compare the cash-based model with the traditional goods-based model to evaluate their respective effectiveness in achieving policy objectives. As such, it will offer recommendations that are especially relevant for policy makers, as well as IMF officials, as they attempt to shape fiscal and social infrastructures in Egypt.
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