Al-Sisi fails to control price increases

Shaimaa Al-Aees
6 Min Read
Egypt’s cabinet decided in September to impose price ceilings on fruits and vegetables. (Photo by Aaron T. Rose)

Despite considerable efforts made by the Egyptian government under President Abdel Fattah Al-Sisi in attempts to control price increases, prices have steadily climbed during the two years of his presidency.

Prices have increased anywhere from 50-100% across the board, particularly in the past three months since the Central Bank of Egypt (CBE) announced it would devaluate the Egyptian pound against the US dollar.

Al-Sisi has tried to attract attention away from the increasing prices on fuel, gasoline, electricity, and water by appeasing them and providing additional supplies to subsidised items—although there have been reports of empty shells of subsidised items—and emphasising the role of the army in distributing goods, meat, and poultry at subsidised prices.

Since the CBE’s modification of the exchange rate, however, it has become difficult, if not impossible, to control the prices of goods and commodities.

When Al-Sisi first came to power, he promised not to increase the prices of goods in order to help the average Egyptian make ends meet. The president promised to solve the crisis of rising gasoline and electricity prices as well as the bread crisis. While Al-Sisi has made progress in alleviating the bread crisis, fuel and electricity prices have continued to climb.

During most of his speeches to Egyptians, Al-Sisi has persistently stressed that there is no increase in prices, despite the reality pointing otherwise.

In a television interview on the occasion of the two-year anniversary of his appointment, the president claimed that Egyptians are still purchasing services and goods at prices lower than the actual cost of these products.

He also said that the government has not yet been able to collect EGP 50bn in electricity dues that are owed by Egyptians.

Al-Sisi pointed out that there are 30 million Egyptians that are dependent on the electricity system, which has yet to see needed improvements or reform.

Electricity is still provided to many citizens as part of a subsidy package, Al-Sisi said, pointing out that all countries are keen on rationalising their use of water, electricity, and gas because, despite government discounts, the citizen consumes everything at its real price.

In another meeting with students at Suez Canal University in September 2015, Al-Sisi said the price increases are a crisis affecting large segments of the population. Al-Sisi stressed that the state is aiming to control this problem.

Al-Sisi praised the initiatives aiming to boycott some food commodities that have witnessed a dramatic increase in prices, adding that these initiatives deserve gratitude because the aim is to tackle extraordinary price increases and bring them down to appropriate levels.

He pointed out that a year ago the government sought to create a system to fight prices increases, but was too late in being able to control some prices. However, Al-Sisi said the system will work to meet the demand of controlling prices.

During the celebration of the East Port Said project in November 2015, Al-Sisi said that by the end of December there would be a decrease in the prices of fundamental goods. Meanwhile, during his meeting with representatives of parliament in April 2016, the president made a promise to not increase prices in the coming period, saying: “Ramadan kareem and we confirm that there is no increase in prices in the coming period.”

However, all these promises do not match with what is going on in local markets and corner stores. Vegetables, for example, represent one food stable that has seen prices increase dramatically. A kilo of lemons has reached EGP 30 ($3.3) and a kilo of meat has reached EGP 110 ($12.2).  Food commodities have increased by 25% to 30%.

The price of rice remains high, with a kilo costing EGP 8. This is despite the government’s attempt to ban rice exports.

Aside from food, low-income citizens are also plagued with the reality of the rising cost of medicines. The cabinet decided in May to raise the cost of medicine priced at less than EGP 30 by 20%.

The Egyptian Centre for Public Opinion Research (Baseera) conducted a poll in 2016 in which creating job opportunities ranked as the most important issue for Al-Sisi’s second year in office. The poll says 45% of Egyptians believe he failed in this regard, while 34% of Egyptians say that the president failed at reducing prices or preventing price increases from taking place.

Egyptians in the streets are divided on the issue of price increases, with some being for it and some against.

Some claim, particularly among supporters of Al-Sisi, that former president Mohamed Morsi is responsible for the price increases and Al-Sisi is working to solve budget deficit and the US dollar crisis.

“I feel that I am very cheap and very poor and when I go to the market to buy my home needs and ingredients,” says a housewife in Cairo. “Every day I go to the market and most of the days I return back home without buying anything because of the prices and my budget.”

Another employee in a government agency said the current government has failed to control prices like Morsi’s government.


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