The EU and Egypt sign a $94 million deal to boost food security

From the newsletter

Egypt and the European Commission have signed a $94 million soft funding agreement to enhance food security. The funding, provided by the European Investment Bank, aims to improve Egypt’s wheat storage and logistics. Despite health investments, Egypt faces high malnutrition rates, with stunting, wasting, and anemia affecting children.

• The initiative is part of the broader Food Resilience Project, which is supported by the European Union and the World Bank, along with additional grants and funding totalling $219.3 million.

• Wheat is a staple in the Egyptian diet and is essential for nutritional security. However, due to its large population and limited domestic production, the country relies heavily on imports.

More details

• The project aims to upgrade and expand Egypt's grain storage through the National Silos Program, enabling the General Authority for Supply of Commodities (GASC) to procure wheat for milling. As part of a broader food security initiative, the European Union is providing a grant of 100 million euros, while the World Bank is contributing 110 million euros in concessional funding.

• Global efforts have been made to enhance wheat supply in Egypt. Wheat is a staple food used to produce subsidised bread for tens of millions of Egyptians, helping to shield them from malnutrition. In February 2025, GASC signed a $700 million loan agreement with the Islamic Trade Finance Corporation to strengthen its food security initiatives. This loan forms part of an ongoing collaboration with the Saudi organisation, which has assisted Egypt in securing essential goods such as wheat.

• In November 2024, Egypt's Ministries of Planning, Economic Development, and Agriculture, in partnership with the British Embassy in Cairo, launched a project to support small wheat farmers. Titled "Enhancing Food Security and Achieving Economic Stability in Egypt," this initiative represented the first practical step in implementing the Memorandum of Understanding signed between Egypt and the UK, aimed at addressing the country's persistent food security challenges.

• As Africa’s largest wheat importer and producer, Egypt meets only 45% of its wheat needs domestically, relying on imports for 55-60% of its annual wheat consumption, which exceeds 20 million tonnes. Food insecurity remains a pressing issue, affecting 14.4% of the population, according to the World Food Programme.

• To enhance food security, the government plans to construct six new wheat silos, adding 420,000 tonnes of storage capacity and raising the total to 4.62 million tonnes. Additionally, it aims to expand wheat cultivation by 126,000 hectares, reaching 1.47 million hectares by the 2024/2025 season. By 2028, Egypt's public silo storage capacity is expected to grow to between 6.4 and 7 million tonnes.

Our take

• Investing in wheat is vital for Egypt's food security, particularly in supplying subsidised bread to over 71 million people, nearly two-thirds of the population. Bread is a staple and lifeline for millions living near or below the poverty line. Without increased wheat storage and imports, millions could be pushed closer to malnutrition.

• Although the price of subsidised bread rose from 5 piasters to 20 piasters per loaf in June 2024, the programme still protects Egypt's most vulnerable citizens from economic shocks. Producing 100 billion loaves annually, the programme provides low-income families with access to affordable bread, compensating bakeries for 84% of production costs.

• Further investments in wheat will enable Egypt to continue offering affordable bread despite climate challenges. By improving wheat storage and logistics, the country can mitigate the impacts of climate change on food security. Expanding the supply of subsidised bread is crucial for preventing hunger and malnutrition among the most vulnerable Egyptians.