Egypt's El Sisi says government can do no more to stop food price surge

Package of measures includes subsidies, minimum wage rises, pension hikes and a delayed electricity charge increase

Egyptian President Abdel Fattah El Sisi addressed the issue of rising prices as well as criticism of the government's infrastructure projects. AFP

The Egyptian government has done all that it can to control the cost of food, President Abdel Fattah El Sisi said on Monday, while also acknowledging the burden placed on the country's 104 million people by surging prices.

Egypt's inflation rate is approaching 20 per cent, which, along with a foreign exchange crunch and a sliding currency, are part of a deepening economic crisis that the government blames on the effects of the Russia-Ukraine war and the coronavirus pandemic.

“We are trying as much as we can to check the increase of prices,” Mr El Sisi said in televised remarks at the opening of a factory for gases used for medical purposes.

“Don’t ever think that we, as officials and human beings, are not aware that prices are a burden on people. But, by God, there is nothing we can do more than what we already are doing.”

Mr El Sisi, a former army general and the architect of the country’s economic policies since taking office in 2014, said he was consistently breaching “political norms” for the sake of being totally transparent about the state of the economy.

“Do you understand what it means for food prices to double twice or three times? Who can bear this? But please note, the country can deal with this for a year or two and we just don't know when will this stop,” he said.

In response to rising global food and fuel prices after the Ukraine conflict began in February, the government adopted a package of measures to shield the most vulnerable Egyptians.

It has increased the amount of state subsidised food items holders of food cards can buy, raised the minimum wage, increased pensions and put off at least twice planned hikes in electricity charges. The government recently announced measures to prevent profiteering by food retailers and ensure essential goods were sold at “reasonable” prices.

Mr El Sisi also addressed criticism that mega infrastructure projects he has launched since taking office, such as building a new capital and other cities, thousands of kilometres of new roads, power stations and water desalination facilities, were at least partly to blame for the economic crisis.

“People say do less national projects to reduce the demand on the dollar. I say ‘people, no!',” he said.

Demand for the US currency could only be reduced by increasing local production to replace imports, he said.

Mr El Sisi and Prime Minister Mostafa Madbouly, speaking at the same event, said billions of dollars worth of imported goods were being released from ports after being stuck there for months because of the foreign currency shortage.

Mr Madbouly said the total value of the backlog had been brought down to $9.5 billion, from between $15 billion and $16 billion at the end of November.

Of the remaining goods, the most important items will be released within days, he said.

The hold-up of imports has hit industries hard and sparked a dramatic rise in the price of foreign goods, especially food items. Experts say most industries in Egypt are dependent on imports to some degree.

“Going forward, we don’t want factories to stop working and production to slow down,” Mr Madbouly said.