Egyptians losing patience with Sisi as economy deteriorates
A CARTOON which appeared on social media shows a drowning Egyptian, only his hand protruding from the depths, waving for help.
The next strips show President Abdel Fattah el-Sisi diving in, taking the drowning man’s watch and turning away.
The cartoon captures the mood of desperation and anger among Egyptians clobbered by tax rises, soaring food price inflation and cuts in state subsidies. Some fear a repeat of the mass street protests that drove Sisi’s two immediate predecessors from power.
Core inflation is at sevenyear-highs, near 14 percent, as a foreign exchange shortage and a hike in customs duties bite hard. The government raised electricity prices by 25percent to 40percent in August and is phasing in a 13 percent VAT approved by parliament.
As part of reforms aimed at clinching a $12 billion (R168bn) International Monetary Fund (IMF) loan needed to plug its gaping budget deficit, the government also expected to cut petrol subsidies and devalue the Egyptian pound.
“Prices are rising daily, not monthly,” said Gamal Darwish, a civil servant, as he queued to buy subsidised sugar in Cairo.
The government tried to win public support for the austerity measures and sought to expand social security schemes to shield the poorest from the effects of the rising prices.
Stability
But many Egyptians who would not qualify for such schemes complain they can no longer afford meat, while sugar shortages have driven fears of an impending food crisis.
Three years after Sisi seized power, his promise to restore stability is wearing thin.
The arrival of sugar in a government van caused a frenzy in the working class district of Sayyida Zeinab, as people jostled, 10-pound-notes in hand, for 2-kilo rations.
“After two revolutions, the Egyptian people are going backwards not forwards,” said Abdel Hasib Ahmed Mohamed, a middle-aged court employee watching the sugar scrum.
For the government, the case for economic reforms and the need to seal a planned three-year lending programme with the IMF is clear.
Egypt’s economy is likely to grow 3.5percent in the 2016/17 fiscal year, a Reuters poll showed, missing the government’s target of about 5 percent and dipping below last year’s growth rate. The budget deficit is near 10percent of national output. The foreign currency shortage has made it hard for firms to import and foreign investors to repatriate profit.
The government said it secured 60 percent of the bilateral funds, boosting foreign reserves to $19.6bn in September.
The Central Bank governor, Tarek Amer, has said he would consider floating the pound once reserves hit $25bn.
The pound’s depreciation on the black market since the IMF deal was announced in August also poses a big challenge.
Rumours spread that November 11 would be a day of protest over economic conditions. Police have detained about 70 people for inciting protests, accusing many of loyalty to the banned Muslim Brotherhood.
“Food price inflation in Egypt… fell a bit year on year in September, but for the poor it is still for me at a level that is politically toxic,” said Angus Blair, the chief operating officer at Pharos Holding.
Some new policies seem at odds with the government’s reform drive. For example, the Supply Minister said the state would raise subsidies on food smart cards, which give Egyptians points to claim on bread and other items. – Reuters