CAIRO (AP) — Egypt will receive a $500 million loan from the World Bank to help finance its wheat purchases as prices skyrocket because of the Russian invasion of Ukraine, the bank said Wednesday.
The funds, approved Tuesday by the World Bank Board of Executive Directors, aim at supporting Egypt’s efforts to provide subsidized bread to poor and vulnerable households, it said.
It said the funds will help the government of the Arab world's most populous country finance procurement of imported wheat.
“This emergency operation comes at a very critical juncture when the food security of many countries is threatened by the war in Ukraine,” said Marina Wes, World Bank Country Director for Egypt Yemen, and Djibouti.
Egypt is the world’s largest wheat importer, and the country’s supply is subject to price changes on the international market. The war in Europe has already hiked prices of the grain since both Russia and Ukraine export nearly a third of the world’s wheat.
Around 70 million Egyptians rely on government-subsidized bread, mostly made from imported wheat. Around a third of Egypt’s over 103 million people live in poverty, according to official figures.
The government has been struggling to keep bread prices at their current level and has already allowed private bakeries to increase prices.
The government said earlier this month that it plans to cut its imports of wheat by 500,000 tons a year, or around 10%. It will import up to 5.5 million tons in the next fiscal year which starts July 1, according to Supply Minister Ali el-Moselhy.