Egypt raises minimum wage for government employees

Support package to help private sector keep workers during crisis sparked by Russia-Ukraine war

Egyptian Prime Minister Mostafa Madbouly revealed new measures to help the country's workforce financially. AFP

Egypt’s government on Wednesday announced it was raising the minimum wage for government employees to 3,000 pounds ($153) as part of a new 67-billion-pound ($3.39bn) support package to help the vulnerable segment of the population cope with soaring prices.

The package, revealed by Prime Minister Mostafa Madbouly at a news conference, was the latest in a series of measures introduced by the government over the past eight months to mitigate the effect of the economic fallout from the Russia-Ukraine war.

President Abdel Fattah El Sisi, in a two-hour address on Tuesday, said he believed a monthly minimum of 10,000 pounds ($500) was needed for families to make ends meet.

Singling out schoolteachers as an example — there are 25 million schoolchildren in Egypt, nearly a quarter of the population — he said his government could not expect them to be dedicated to educating pupils on salaries of between 3,000 and 4,000 pounds a month.

On Wednesday, Mr Madbouly said the government also intended to soon refer to Parliament for approval a draft legislation raising the maximum exemption from income tax to 30,000 pounds ($1,530) a year from 24,000 pounds ($1,224).

Egypt has been hit hard by the fallout from the war. Its currency has shed about 20 per cent of its value since March. Up to $25 billion left its once lucrative debt market within a month of the outbreak of the war in February. Inflation, fuelled by a steep rise in food and fuel prices, has shot to about 16 per cent and is expected to rise further if the currency continues to spiral downwards.

A foreign currency crunch has also hit local industry dependent on imported components.

The effects of the war caught Egypt, the most populous Arab nation with 104 million people, as it was recovering from the devastation its economy suffered during the coronavirus pandemic.

Beside the higher minimum wage and tax exemption, the Egyptian prime minister said the government was also putting together a mechanism to financially support private sector workers who face the threat of being laid off because their employers are struggling to stay in business.

That financial support would be conditional on their continued employment, Mr Madbouly said.

He said the government had also decided to leave domestic electricity charges unchanged until the end of June next year, shelving previous plans to raise them.

Also extended until June 30, 2023 is a bonus scheme of up to 300 pounds’ worth of subsidised food that has benefited 10.5 million people since its inception this year.