A woman exits a currency exchange office in a Cairo neighborhood on August 24, 2022 with a giant U.S. dollar banknote. (AFP / Khaled DESOUKI)
Limited bank withdrawals, rationing and advertising the nutritional benefits of chicken feet: Egypt is short of dollars and households can’t fill their baskets.
Inflation has officially hit 18.7%, but “the bread I used to buy for a pound now costs three,” Rehab, 34, told AFP.
“My husband earns £6,000 a month” (230 euros), “before that we lasted 30 days, now we’re in the red after ten,” she continues.
A man walks past a chicken for sale at a shop in Cairo on March 17, 2022. ( AFP / Khaled DESOUKI )
With much of the imported goods and an 8% rise in interest rates, everything has melted away: loaves of bread, falafel, bottles of oil, packets of legumes and even baskets at subsidized prices for the 70 million Egyptians who are considered “poor” and therefore holders of a ration card .
Signs at the supermarket warn: “maximum three sacks of rice”, “no more than two bottles of milk” or “one bottle of oil”.
In the newspapers, the National Food Council praised “chicken feet, good for the body and good for the wallet”.
– meat, “no longer an option” –
Market in Ataba Square in the heart of the Egyptian capital Cairo on October 24, 2022 ( AFP / Khaled DESOUKI )
Because meat – frozen and imported, half the price of fresh meat – is “no longer an option: it has gone from 85 to 150 pounds per kilo,” comments Rida, 55, who also refused to give his name.
This matriarch is struggling to support her family of 13: “I’m a civil servant and I clean in a hospital, but even with two salaries there are a lot of things I can’t buy anymore,” she tells AFP.
When prices are skyrocketing, it’s also because importers are struggling to free up dollars: currently, according to authorities, $7 billion worth of products are blocked in ports.
And misinformation thrives: Chinese brands Realme and Oppo and even McDonald’s are regularly given away on social media.
Customers shop at a small public market in a town in the Sinai Peninsula on March 20, 2022. ( AFP / Khaled DESOUKI )
Because, scalded by the bleeding at the start of the war in Ukraine when investors were withdrawing billions of dollars, several banks are now limiting dollar withdrawals abroad and have tripled the cost of using the bank card, while money changers cannot be found.
Even Amr Adib, who is very loyal to the regime, was annoyed in his talk show: “At least let the Egyptians withdraw money for their taxis on vacation!”.
But Cairo is being hit in the throat: it has just $33.5 billion in reserves from February’s 41 – 28 of them in the form of deposits from Gulf allies – and its external debt has more than tripled in 10 years to €150 billion.
– “Do not interrupt” –
In March, then October, Cairo devalued its currency. On Wednesday, the pound lost more than 8% again. In less than ten months it will have fallen by almost 70%.
And for the experts, all traffic lights went red when two public banks announced on Wednesday that they would issue certificates of deposit with 25% interest over one year.
Nonetheless, according to Moody’s, Egypt remains one of the five countries most at risk of defaulting on its external debt.
And the three billion dollars of the new IMF loan weigh little: the debt service for 2022-2023 alone amounts to 42 billion.
The construction site of the “Iconic Tower” in Egypt’s “new capital” east of Cairo, August 3, 2021 (AFP / Khaled DESOUKI)
Transport Minister Kamel al-Wazir offered a solution: Tourists should pay for the train in dollars.
“I need dollars to pay for imported trains. That suits tourists and me too,” Kamel al-Wazir recently explained.
But in order to free up more money, the state wants to privatize everywhere. So much so that public opinion is concerned that Egypt will lose sovereignty over its jewel: the Suez Canal.
It was “not for sale,” the regime hammered, but President Abdel Fattah al-Sissi would like to dig into its income – to set up a fund that he will manage himself.
“Money, I know how to handle it, don’t interfere,” he said recently.
For Stephan Roll from the German Foundation for Science and Politics, Egypt is indebted to “consolidate its authoritarian regime”.
“The army on which Mr. Sissi depends is the first beneficiary: external debt protects his income and property, and finances mega-projects that make him great,” he adds, since most big jobs are entrusted to military engineers.
Far from new cities and shiny electric trains, Rehab just wanted to buy her daughter a coat for the winter.
“But at £1,000 I had to give up,” she says, eyes bleary.