“IFPRI Egypt Webinars” is a special edition of the IFPRI Egypt Seminar Series funded by USAID. This webinar took place under the title of “COVID-19 and social protection: from effective crisis protection to self-reliance”

1. Impact of COVID19 on
Poverty
Presented by Heba Ellaithy

2. Introduction
 COVID 19 affected all countries of the world without exception,
although the impact differed according to their initial economic and
health status.
 COVID 19 is not the cause of the difficulties that Egyptian suffer, but it
reveals the vulnerable health, employment and economic conditions.
 COVID 19 crisis points to the need to adopt the production model (as
Professor Judah Abdel-Khaleq called it) which gives priority to investing
in people and thus giving top priority to the advancement of the
sectors of health and education and in the fields of agriculture and
industry.
 Prof Judah Abdel-Khaleq mentioned that health and educational
services are public goods and therefore they should not be provided by
the private sector only, and if the private sector can participate, the
services it provides must be monitored in line with the general
objectives of the state.

3. Objectives
Assessing the impact on COVID 19 on living standards
We start by assessing situation before 2020 and then
evaluate the impact of COVID 19.
Analysis covers
 Poverty and income
 Food security
 Employment
 Social protection

4. Poverty and food
security

5. • 31 million Egyptians (more than 7.5 million families) were below
the poverty line in 2017/2018
• Two thirds of the poor still reside in the rural areas, and rural
Upper Egypt exhibited the highest poverty rate (52%).
• The period from 2015 to 2018 witnessed an increase in economic
growth rates, but due to the decrease in consumption and the
very high cost of living and consequently the decrease in real per
capita consumption: poverty indicators increased.
• The poor suffered from a lack of food security in terms of their
ability to access healthy food and utilization.
Poverty and food security
5

6. The impact of COVID 19 on households’
standard of living
• What is the percentage of
individuals experiencing
reduction in income?
• What are the reasons for
this reduction?
Changes in
income
• Did the change in prices
lead to a change in the
consumption pattern?
• Did COVID19 lead to the
consumption of goods
that were not consumed
previously?
Changes in
consumption
patterns

7. Impact of COVID 19 on income
% of individuals by type of change in their income
87.9 79.1 72.7
63.4 56.5
68.8
77.3 73.5
11.6
20.2 26.4
36.3 42.4
30.7
21.8 25.8
0.4 0.7 0.9 0.4 1.1 0.5 0.9 0.7
0
10
20
30
40
50
60
70
80
90
100
15-24 25-34 35-44 45-54 55-64 ‫حضر‬ ‫ريف‬ ‫السكان‬ ‫جميع‬
‫العمر‬ ‫اإلقامه‬ ‫مكان‬
%
‫إنخفض‬ ‫هو‬ ‫كما‬ ‫زاد‬
• About a quarter of individuals were not affected by COVID 19 ,
• The majority of individuals (73.5%) reported that income has decreased,
and less than 1% reported an increase in income.
• The greater the person’s age, the lower impact on income. This may be
due to the increase in work stability as the person gets older.
• COVID 19 affects the income of persons reside in rural areas is much
stronger than urban residence.

8. Impact of COVID 19 on income
%of individuals by reason for declining income60.5
34.7
30.7
15.5
12.9
3.5
0.3
60.1
36.1
32.1
13.7
12.9
1.2
0.5
60.3
35.5
31.5
14.5
12.9
2.2
0.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Precautionary
measures
unemployment Decreased demand
for activity
The employer
reduced the wage
The project is paused Activity was closed
permenantly
NGO / charity aid
had stopped
%
Urban Rural Total
• The precaution measures are the most important reasons for the decrease in
income, as indicated by 60.3% of those whose income decreased,
• 35.5% indicated that unemployment is the cause, and the decrease in the
demand for activity (mentioned by 31.5%).
• The reduction in wages caused the decrease in income for 15% of the
individuals whose income decreased
• These percentages are close to both urban and rural.

9. Impact of COVID 19 on income
Adequacy of income to meet households’ needs
68.2 65.7 66.8
31.8 34.3 33.2
0
20
40
60
80
Urban Rural Total
%
% of households with adequate income
by place of residence
adequate inadequate
70.2
62.5 61.3
29.8
37.5 38.7
0.0
20.0
40.0
60.0
80.0
1 _ 4 5 _ 6 7 +
%
% of households with adequate income
by size categories
adequate inadequate
• About one third of households suffer from inadequate income to meet
their needs during the past month, and the percentage increased
slightly in rural areas to reach 34.3% compared to 31.8% in urban areas.
• The lowest percentage of inadequate income was 29.8% for small-sized
families (1-4 members), and the percentage gradually increased as
household size increases reach 38.7% for households with 7 or more
members.

10. Impact of COVID19 on consumption
patterns
71.1 69.6 67 65.9
48.2
1.9 1.4
1.9
35.8 36.8 34.5 33.8 35.6
3.5 3.1 2.54.3 3.9 4.6 6.8
23.6
91 92.2
88.7
0
10
20
30
40
50
60
70
80
90
100
Meat Poultry Fish fruit Clothing School fees Private classes Transportation
and
transportation
expenses
%
price increases
Reduction in income
Reasons related to the precautionary measures to confront the virus
• Increase in commodity prices and the decrease in family income are the main
reasons for reducing household consumption of some food commodities (meat -
poultry - fish) for about 70% of households.
• The reason for the decrease spending on school fees, private lessons,
transportation and transportation was mostly due to precaution measures.

11. • 73.5% of individuals have
decreased income,
• Precaution measures and
unemployment are among the
most important causes of low
income.
Change in
income
• 70% reduced their consumption
from nourished food
• Consuming cheaper goods due
to the increase in the prices
• Consumption of goods that were
not previously consumed
Changes in
consumption
pattern
The Impact of COVID 19 on
households’ standard of living

12. The Impact of COVID 19 on households’
standard of living and food security
 Decreases in income, increases in prices and increases in
household consumption of medical tools, detergents led to
decreases in the household consumption of some basic
commodities such as meat, poultry, fish and fruits, and to
resort to increasing consumption of cheaper commodities
such as rice, edible oil and legumes.
 Access to healthy and nutritious food might become ever
more difficult for low income and poor groups.
 The effects of COVID19 on the living standards, poverty and
dietary diversity are obvious.
 It is expected that per capita consumption declined by 4% and
with growth elasticity of 2.65, poverty is expected to increase
by 4 percentage points, keeping other indicators constant.

13.  Unemployment Rates decreased from the end of 2015 (12.8%) to mid-
2018 (7.5%). This accompanied by shrinking labor force participation.
This implies that the unemployment rate may fall, even though there
has been no underlying improvement in the labour market.
• Poor Workers: Most employed people (45%) working outside
establishment and other 38% in Private sector
• There is a close correlation between job stability, informal work and
poverty
• 60% of wage workers do not have any work contracts or temporary
contracts, and the percentage among the poor rises to 77% compared
to 52% of the non-poor.
• Working in temporary jobs among the poor is twice that among the
non-poor
13
Employment

14. Beneficiaries of social insurance,
2018
• In general, 21.3% of the population receives or subscribes to social
insurance.
• The poor are less likely to participate or benefit from social insurance, as
only 13% of the poor are participants or beneficiaries of social insurance.
• This percentage is greater among males compared to females, and in
urban areas higher than in the rural areas.
13.6
24.9 25.7
16.8
26
17.8
21.3
0
5
10
15
20
25
30
Poor Non-Poor Males Females Urban Rural
Poverty Status Gender Residence Total

15. To sum up
 Despite the high rates of economic growth and low
unemployment rates, poverty increased due to the lack
of an increase in the workforce, the increase in
discourage unemployment, the rapid growth in sectors
characterized by informal employment, the decrease in
the number of working hours and the real wage, in
addition to the fact that working in marginal sectors or
outside establishments or working temporarily are all
causes leading to more poverty and vulnerability.

16. The impact of COVID19 on
employment and work
• The percentage of
individuals whose
condition has changed in
the process
Change in
employment
status
• Are the workers
unemployed or are they
working intermittently, or
are they working part-
time?
How was the
changes

17. 65.8 63.9 64.7
55.8
47.1
51.3
63.5 60.7 61.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
‫حضر‬ ‫ريف‬ ‫اجمالى‬
By place of residence and gender
‫ذكر‬ ‫أنثى‬ ‫جمله‬
66.4 67.5
61.5
57.2
52.6
0
10
20
30
40
50
60
70
80
15 -- 24 25 -- 34 35 -- 44 45 -- 54 55 -- 64
%
By age groups
• 61.9% of individuals experienced changes in working condition, and
that percentage is higher among males than females (64.7% versus
51.3% respectively), and for both urban and rural areas.
• The highest percentage of employed individuals affected by the
change in the working situation was for the age group (25-34 years),
reaching 67.5%.
The impact of COVID 19 on employment
% of employed individuals whose working condition has
changed since the emergence of COVID 19

18. 24.3
31
25.7
26.3
28.8
26.7
25.5
29.9
26.2
15.5
12.3
14.8
21.8
14.2
20.7
19.1
13.2
18.1
60.2
56.7
59.5
51.8
57.1
52.6
55.4
56.9
55.7
0% 20% 40% 60% 80% 100%
‫ذكور‬
‫إناث‬
‫جمله‬
‫ذكور‬
‫إناث‬
‫جمله‬
‫ذكور‬
‫إناث‬
‫جمله‬
‫حضر‬‫ريف‬‫جمله‬
Distribution of individuals whose employment status
has changed by type of change, place of residence and
gender
‫تعطلت‬ ‫متقطع‬ ‫عمل‬ ‫اقل‬ ‫بايام‬ ‫عمل‬/‫اقل‬ ‫ساعات‬
%
 More than half of the
employed persons (55.7%)
worked fewer working
days or working hours less
than usual.
 About a quarter of the
individuals (26.2%)
became unemployed, and
18% of them work
intermittently
 The same pattern is
observed for both males
and females. But the
percentage of unemployed
females is higher than that
of males.
The impact of COVID 19 on employment
changes in employment status since the emergence of
COVID 19

19. The impact of COVID 19 on
employment
 COVID 19 crisis demonstrated the extent of the vulnerability of the Egyptian
labor market
 As about 62% of the employed individuals have been affected by COVID19
crisis, 26% of them became unemployed, about 56% are worked fewer days or
working hours less than usual, and about 18% are working intermittent.
 About 74% of the individuals suffered from a decrease in income, and the
decrease in income for most of them was related to the labor market
conditions; unemployment, reduction of wages or closure of activity.
 About a quarter of individuals reported stable income since the emergence of
the virus, and the majority of individuals (73.5%) reported that income had
decreased, and less than 1% reported an increase in income.

20. Impact of COVID 19 on
employment
 COVID 19 clear the necessity of adopting a social policy that
achieves social protection floor as recommended by the
International Labor Organization;
 provide a minimum income at an acceptable level for persons of
working age who are unable to earn sufficient income, especially
in the event of illness, unemployment.
 provide of basic health care, including maternity care, at a
nationally determined minimum level that meets the criteria of
availability, accessibility, acceptability and quality.
 adopt a new employment policy and bring about fundamental
changes in education, training and investment in human capital,
health, education and knowledge.

21. Without Takaful and
daman transfers
With Takaful and
daman Transfers
Reduction
in % points
% Change
All population
p0 35.32 32.5 -2.8 -8.0
p1 8.15 6.61 -1.5 -18.9
p2 2.90 2.03 -0.9 -30.0
Takaful and daman Beneficiaries
p0 65.28 62.18 -3.1 -4.7
p1 19.47 14.44 -5.0 -25.8
p2 8.1 4.77 -3.3 -41.1
21
Impact of all cash transfer
programs on Poverty Status
Poverty measures without and with Takaful program
 Reduction in overall poverty incidence due to Takaful 2.8 percentage points (8%)
and reduction in poverty gap is 1.5 (19%) and in squared poverty gap is 0.9 (30%)
indicating that Takaful target the poorest of the poor
 Cash transfers markedly affect the situation of beneficiaries.
 Impact on poverty gap is larger, indicating improved living standards even some
households remained poor

22. Government response
 The Government of Egypt has proactively taken important steps to address and
mitigate the impact of the outbreak. Scaling up social protection interventions.
 expand the coverage of Takaful and Karama to reach all poor, which may involve
lifting some exclusion criteria or adding previously discarded beneficiaries
which would now be more vulnerable and Review the eligibility system to
ensure access to the non-contributory social protection.
 1,364,692 million beneficiaries out of the 1,749,819 registered in the Social
Solidarity Pension (Daman) were assessed to be enrolled in T& K programs.
 The number of beneficiaries reached 3,100 thousands households to date,
there are still 400 thousands Daman beneficiaries needed to be enrolled after
certification.
 About 100 thousands beneficiaries were enrolled in the programs in April 2020
to include more vulnerable households who were badly hit by Covid-19 crises.
Accordingly new cutoff points for PMT formula was applied taking into accounts
the age of household’s head

23. Distribution of cash transfer
beneficiaries by Poverty status
62.13
19.6
18.27
Poor Near poor Non poor
76.2
12.32
11.48
Poor Near poor Non poor
76% of the poor were covered, but 11.5% of the non-poor
received benefits
Before increasing the number of beneficiaries, 62% of
benefits are channeled to the poor and 18% leaks,
After program expanded
(actual)
If the program did not expand

24. Simulation of poverty
Keeping
beneficiarie
s as in
2017/18
Include
Daman
beneficiarie
s in Takaful ;
increase the
coverage
Reductio
n in %
points
% Change
All population
% of the poor 30.9 28.1 -2.8 -8.9
Poverty Gap 6.2 4.5 -1.7 -27.7
Beneficiaries
% of the poor 76.2 60 -16.2 -21.3
Poverty Gap 20.7 11.3 -9.4 -45.4

25. 25
Thanks