Synopsis
TKP was launched in 2015 to mitigate the impact of economic reforms on the poor including energy subsidy removal. It was designed as a well-targeted cash transfer program with a solid delivery system, and a conditionality element that aims to achieve long-term development goals by promoting human capital accumulation through access to health and education services. As of December 2023, the TKP program has achieved the following results: 4.67 million households enrolled (of which, 75 percent are women); around 17 million direct and indirect beneficiaries; 51 percent of Takaful households comply with the health conditionality of three health unit visits per year; 63 percent of Takaful households comply with the education conditionality of 80 percent school attendance; and 100 percent of beneficiaries are paid through electronic means.
Beneficiaries Quotes
Eman Ramadan Abdel Rahman, a wage employment beneficiary, who received a job through FORSA: “Now that I have a steady income, I am paying off my debts. In addition to the vocational experience, this job also allows me to interact with a lot of people. I feel happy and healthy. I believe all women should gain [job] experience, see different things, and enjoy life.”
Riham, a Takaful program beneficiary, expressed her satisfaction at being able to have disposable income due to the cash transfers and her increased empowerment at making purchasing decisions: “If I want to buy something for the house, I go buy it. I make the decision because each woman knows what her house needs. I also make decisions when I’m buying something personal for myself. But if it’s something general for the house, then I ask for my husband’s opinion.”
Mervat, another Takaful beneficiary, talks about how she stretches the cash transfers, “Since I received the Takaful transfer, I paid pending tuition fees for my children. I still have EGP 300 ($ 6.15) which I spend on my family as needed.”
Mastoura, a Karama beneficiary, tells us about the positive effects of the health and Karama benefits she has received, “I was examined by the general medical board and was diagnosed with a high stage of fibrosis. I also suffer from hepatomegaly and splenomegaly. So, they decided that I need a “Karama” pension. I got my EGP 350. I paid 250 EGP ($5.12) for my medical examinations and bought a kilo of meat for my children with the rest of the money.’’
Challenge
Egypt’s social protection system faced challenges of fragmentation, with several poorly targeted cash assistance programs that were not automated and lacked mechanisms for citizen feedback. In 2014, Egypt introduced a series of structural and economic reforms to reduce its large fiscal deficit and restore macroeconomic stability by moving away from universal subsidies, including gradually removing energy subsidies, devaluating the Egyptian Pound, and introducing a value added tax. These efforts subsequently led to high inflation. To mitigate the impact of this economic shock, a targeted cash transfer program, Takaful and Karama, was rolled out in 2015.
Approach
The Takaful and Karama program (TKP) incorporates two major components. Takaful (which means “solidarity” in Arabic) is a conditional cash transfer program. It targets poor families with children, requiring them to meet health and education conditionalities (three health visits for mother and child, and 80 percent school attendance for children) in order to prompt behavioral change and promote human capital accumulation to break cycles of intergenerational poverty.
Karama (which means “dignity” in Arabic) is an unconditional cash transfer program that covers poor persons living with disability, elderly persons over 65 years of age, orphans, and widows.
TKP efficiently targets beneficiaries using Proxy Means Testing (PMT) methodologies to estimate household welfare, and it has a solid delivery chain, including a grievance mechanism and a dynamic and adaptive shock-responsive social registry which includes all applicants to the program since its inception (whether enrolled or not) and which has reached around 11.3 million registered households (40.5 million individuals). In addition to being a targeted program using proxy means testing, the aim was to consolidate all cash benefits under one national umbrella program.
All TKP beneficiaries receive access to Meeza cards (debit cards), which allow them to make digital payments or cash in their benefits through ATMs and other outlets, rather than having to visit a on post office to receive these benefits as previously the case.
TKP leverages its data on beneficiaries, housed under the social registry, to design multiple citizen centric cash-plus interventions based on big data analysis. These interventions include 1) interventions that aim to combat illiteracy through literacy classes, 2) raise awareness to help curb fertility rates, 3) facilitate access to reproductive health and subsidized family planning services through health clinics, 4) improve housing conditions (such as roofing, flooring) and 5) improve child nutrition and well-being through additional financial support for mothers with children under two years of age. All TKP beneficiaries are automatically linked with the food subsidy program and universal health insurance.
Another key cash-plus intervention is the economic inclusion program “FORSA,” (which means “Opportunity” in Arabic), which was launched in 2020 and supports the creation of job opportunities and reached around 26,312 beneficiaries by December 2023. The aim of this program is to move beneficiaries from protection to production by reducing dependency on cash and creating livelihood opportunities, including linking beneficiaries to employment services and providing training and asset transfers.
The project’s citizen-centric approach, health and education conditionalities, which aim to promote human capital development through access to relevant services, introducing conditionality to combat early marriage to protect and empower girls, and cash-plus interventions (including on illiteracy eradication, reproductive health, awareness raising, and child nutrition), have allowed it to play a transformative role in promoting human capital accumulation with a specific focus on women’s empowerment. This is coupled with a very strong community awareness campaign, entitled Waii (awareness), which is led by community social workers and public campaigns, including the use of art, theater, and music, to raise awareness on social issues such as gender-based violence, female genital mutilation, early marriage, substance abuse, positive parenting, reproductive health, and hygiene and nutrition.
Results
The Takaful and Karama Program has become a platform that enables human capital development as well as women’s empowerment in Egypt, through health and education conditionalities and a series of cash-plus interventions to tackle reproductive health and family planning, illiteracy, child malnutrition and stunting, and tackling unemployment and dependence on cash transfers through economic inclusion interventions.
The program has been institutionalized within the government of Egypt through a legislative decree and a dedicated budget line in the national budget which has been steadily growing from EGP 3.6 billion ($ 71.7 million) in 2015 to EGP 41 billion ($ 81.4 million) in 2024. The increase in allocation of resources and recent increase in benefit size by 55 percent in 2023/2024 (in light of inflation) is a testimony that the government views the program as well targeted and a channel to cope and mitigate multiple crises (economic shocks; COVID-19 pandemic). The Ministry of Social Solidarity in collaboration with the World Bank has also been producing a number of case studies and videos to document the journey and currently working on a TKP Depository (will include internal platforms for the Ministry staff and external website).
As of December 2023, 4.67 million households (comprising approximately 17 million individuals, 50 percent of whom are women) are enrolled in the Takaful and Karama Program. The expansion of the program has been made possible over the years thanks to the program’s strong delivery system and its adaptive and shock responsive social registry. These factors enabled effective project expansion in response to consecutive crises in recent years such as the COVID-19 pandemic, the devaluation of the Egyptian pound, and the repercussions of the war in Ukraine.
The program exhibits strong targeting performance with only 6.4 percent leakage to non-poor households. Independent evaluations of TKP by the International Food Policy Research Institute (IFPRI) in 2018 and 2022, show that it has led to improvements in the quality of diets and child nutrition, increase in consumption by 8.4 percent (2018), reduced the probability of falling below the poverty line by 12 percent (2018), increased the likelihood of enrollment in primary (9 percentage points) and secondary schools (21 percentage points) (2022), and helped households avoid negative coping strategies during the COVID-19 pandemic.
The project has also consolidated Egypt’s cash transfer programs under the umbrella of TKP by transitioning the beneficiaries of the old social pension program “Daman” to TKP using the program’s PMT.
The World Bank’s Advisory Services and Analytics (ASA), which are non-lending activities that help clients to advance a development objective, for Egypt’s 2022 Public Expenditure Review for Human Development demonstrated that TKP is well-targeted and that the government should increase coverage and benefit size. In 2023, coverage went up to almost 5 million households and the benefit level was increased by 40 percent. An additional increase of 15 percent was announced in February 2024.
World Bank Group Contribution
The project is supported by two International Bank for Reconstruction and Development (IBRD) loans totaling $900 million. The project has also received parallel financing in the amount of approximately $3 million through the United Kingdom Trust Fund over the course of its implementation. The project also received a small contribution from the Nordic Trust Fund (to support disability assessments) and from the Partnership for Economic Inclusion (to support FORSA).
Partnerships
The Takaful and Karama Project is implemented by the Ministry of Social Solidarity (MOSS), which liaises with the Ministries of Education and Health for the conditionality component of Takaful. The program has very strong partnerships, between government including Ministries of Health, education and Supply and Internal Trade, as well as with NGOs and the private sector, especially in the context of the FORSA economic inclusion program, and with UN Agencies for the cash-plus interventions. The TK national program has been gaining regional and global recognition with numerous study tours organized by the World Bank for knowledge exchange, including with Sudan, Yemen, Iraq, Jordan, and Gabon.
TKP collaborates with United Nations agencies on complementary cash-plus interventions, which build on the TKP registry and target TKP beneficiaries. One such initiative, entitled “Two is enough,” provides subsidized family planning services in collaboration with the United Nations Population Fund (UNFPA). Another such program is “Waii,” an awareness program with the UN Development Programme (UNDP), which promotes equal access to education, family planning, positive parenting. The “1,000 days program,” with the World Food Programme (WFP) gives additional cash to Takaful mothers for improved nutrition. TKP also collaborates with the International Labour Organization and Food and Agriculture Organization under the FORSA program for wage and self-employment tracks. The project has also been supported by the UK Trust Fund throughout the implementation period and the Nordic Trust Fund. The wide range of partners has contributed to enhanced coordination and integration among the different government entities as well as ensured complementarity with donor activities.
Looking Ahead
The World Bank continues to support Egypt’s efforts to increase TKP’s efficiency and effectiveness by strengthening the delivery system, building the management information system, and bolstering the capacities of social and community workers that engage with beneficiaries. The Takaful and Karama Program needs to continue to analyze the big data collected under the social registry to better respond to climate change issues and to scale up cash-plus interventions, particularly for the FORSA program. Additional complementary efforts are taking place regarding social protection reforms, including further developing the Unified National Registry (UNR) by the Administrative Control Authority (ACA), which plays a key role in improving the targeting and reform of social protection programs, including food subsidies. Reforms are also underway in Egypt’s pension system, focused on implementation of a 2019 reform law and led by the National Organization for Social Insurance (NOSI). The World Bank is supporting NOSI with technical assistance to strengthen systems and carry out digitalization.
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