By Yasser Hakim, Cairo, Egypt
Egypt is grappling with soaring inflation, skyrocketing to a 38% annual rate in September. Essential commodities’ prices have burgeoned since early 2022, notably due to the conflict in Ukraine, burdening Egypt’s predominantly impoverished population of 105 million.
Investor Hossam Eid notes, “Global inflation, exacerbated by production costs and supply shortages due to the conflict, has significantly impacted countries like Egypt. Large traders also exploit the situation, hoarding products to monopolise the market and capitalizing on price increases.”
For residents like Khaled from Giza, this inflation translates to tangible hardships. “Fruits have become luxury items. My budget hardly covers basic food needs. Proteins like chicken and meat are consumed once every two weeks, versus twice a week.”
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In a strategic response, Prime Minister Mostafa Madbouly announced a comprehensive plan to quell the economic turbulence and public discontent by initiating a price cut on fundamental commodities.
This emergency measure involves negotiating with traders’ and producers’ unions to identify the inflation causes. The government resolves to suspend customs tariffs on imports of essential goods and production of raw materials.
Moreover, they plan to furnish hard currency to amplify commodity imports and increase market supply, aiming to depress prices by 15-25%.
Commodities witnessing these discounts will encompass beans, lentils, dairy products, pasta, sugar, cooking oil, rice, eggs, chicken, and meat. Additionally, export bans will be imposed on certain commodities like sugar and onions to hinder further price surges.
PM Madbouly asserts, “The new discounted prices will be widely communicated to prevent misuse by traders. A weekly committee, which I will lead, will oversee the initiative’s implementation. We aim to swiftly address issues and ensure adherence from all parties, aiming for a sustainable long-term price control plan.”
However, some critics argue that further actions are imperative for enduring stability. Investor Hossam Eid suggests, “To truly quell this crisis, investments in manufacturing must be encouraged to bolster local production, thereby swiftly augmenting supply to meet market demand and concurrently reducing the substantial import bill that has recently inflated commodity prices.”
Officials indicate that the current measures will persist for six months, after which a review will assess the plan’s efficacy and determine any possible extensions.
*CGTN is BGTN content partner.
