The new year has not been a happy one for Egypt, with consumers hit by steep price hikes and a sharp drop in traffic through the Suez Canal affecting one of the government's main sources of foreign exchange.
Meanwhile, billions of dollars of loan repayments are due throughout 2024.
Ordinary Egyptians, who have struggled with soaring inflation and austerity measures since the country's economic troubles began in March 2022, told The National that January has been the most difficult month so far.
Despite Egypt's headline inflation dropping to 33.6 per cent in December, down from 34.6 per cent the previous month, food prices have risen this month.
Some items, such as beans, doubled in price between December and January, while dairy products and cooking oil rose by about 30 per cent and 15 per cent.
On January 1, state-owned and private telecoms companies raised internet charges by more than 30 per cent. At the same time, steel companies raised prices by about 10 per cent, resulting in a similar rise in construction costs.
The Egyptian Transport Ministry also raised metro prices by 20 per cent at the start of the month.
The situation was only made worse by the black market exchange rate for the US dollar, which sank to a record low of 64 Egyptian pounds per greenback, more than double the official exchange rate of 31 pounds.
Due to a shortage of US dollars in the country's banks, importers, industrialists and manufacturers, all of whom rely on imported components, have to purchase any FX they might need to run their businesses through the black market.
Left with few options to preserve the value of their dwindling savings, some Egyptians have tried to make use of the rapid inflation by buying goods to resell just days or weeks later at much higher prices.
“I bought this Philips iron earlier this month for around 2,900 pounds. I didn’t use it and went back to return it about a week later. The shop owner said he would take it back for the same amount of money I had paid, even though he had the same one displayed in his window for around 1,000 pounds more. I didn’t think it was fair, so I decided to sell it on Facebook. I managed to sell it about two weeks after for 4,300,” said Ali Osman, 45, an Egyptian father of three.
Mr Osman, a mason who specialises in marble work, has been out of work since November after the contractor he was working with shut down the operation. After selling the Phillips iron, he bought two blenders, which he plans to sell once prices have increased enough for profit.
Others have been doing the same with branded clothing, which has skyrocketed in price.
“I received a pair of Nike trainers as a gift but then I was strapped for cash so I decided to sell them. I checked the prices and the pair were selling for 12,000 Egyptian pounds. That was crazy to me, they’re a pair of shoes whose price is worth one month’s rent,” said Mahinour Abbas, 32, a PR agent, “I ended up selling them for 10,000. I then bought another pair of Nikes that were slightly cheaper. I'll sell them later when prices rise.”
Egyptians who can afford it have also been purchasing gold to preserve the value of their savings, which has driven up the price of bullion.
The rising demand drove the price of one gram of 21-carat gold to about 3,800 Egyptian pounds ($123) on Thursday, compared to about 3,200 on December 1.
Egypt's government has turned to the International Monetary Fund for loans to help it through the crisis, but this comes with strict conditions such as reducing public spending and a free float of the local currency.
The fund says that floating the currency will quieten fears about the stability of the Egyptian pound and encourage foreign direct investment, but Hassan El Sady, a professor of finance and investment at Cairo University, says it will most likely drive investors away.
“This is not my opinion, this is all recorded data. If you look at the history of direct foreign investment in Egypt, it usually peaks when there are strict controls on the currency by the central bank. This is because investors don’t want to move their money to a place where one day the dollar is trading for 30 pounds, only to double to 60 the next day. That is the opposite of stability,” Mr El Sady told The National.
The rising costs have also eroded public trust in the country’s financial institutions, Mr El Sady said.
Apart from encouraging parallel markets, this has reduced direct remittances from Egyptians working abroad – an important source of foreign currency – by about 30 per cent in the first quarter of the current financial year which started in July.
The loss in trust has also enabled currency market profiteering, where “currency traders can pretty much name their price and they know people will pay”, he said.
Mr El Sady said the government needed to act more firmly against this since Egypt is not suffering from a dollar shortage, but rather those holding dollars are less inclined to exchange them through official channels.
Reforming the business environment
“There is little faith that government programmes will generate revenue for citizens which is why various initiatives by the government to entice dollar holders to invest them locally have failed. That is a major failing on the government's part,” he said.
“The IMF is not going to ensure that Egyptians make profits, in fact, it has the opposite effect usually. The government needs to come up with effective investment schemes to ensure that both local and foreign investors make adequate revenue. That is the only way to drum up dollars and get rid of the black market.”
He said 2024 would be tougher for Egypt than 2023 on account of the $32 billion that Egypt has to repay to various creditors over the year.
“The toughest economic conditions are going to be during the first half of the year and that is what we’re seeing already. Around $16.9 billion will be required during the first half of 2024 and the rest by the end of the year. I expect the government will need to borrow more money to pay their debts, which, I fear, will only exacerbate the cycle.”
Compounding the problem is the drop in dollar revenue from the Suez Canal because of attacks on shipping by Yemen's Houthi rebels that have forced vessels to avoid the Red Sea. Revenue in the first week of January was down 41 per cent from a year ago, according to the waterway’s authority.
President Abdel Fattah El Sisi, who won a third consecutive term in December, sought to once again reassure Egyptians during a speech on Wednesday to mark Police Day, a public holiday.
“Don't think that I don't appreciate the magnitude of suffering and economic pressures in Egypt. I appreciate even more the tenacity of Egyptians. I know too well that life is tough, the prices are high and the circumstances are difficult,” Mr El Sisi said.
“Prices are high but all of us can manage. If we endure, we will all live.”
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
The%20specs
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The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
NEW ARRIVALS
Benjamin Mendy (Monaco) - £51.75m (Dh247.94m)
Kyle Walker (Tottenham Hotspur) - £45.9m
Bernardo Silva (Monaco) - £45m
Ederson Moraes (Benfica) - £36m
Danilo (Real Madrid) - £27m
Douglas Luiz (Vasco de Gama) - £10.8m
Wonka
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%C2%A0Paul%20King%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%C2%A0%3C%2Fstrong%3ETimothee%20Chalamet%2C%20Olivia%20Colman%2C%20Hugh%20Grant%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%202%2F5%3C%2Fp%3E%0A
SOUTH%20KOREA%20SQUAD
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ICC Women's T20 World Cup Asia Qualifier 2025, Thailand
UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
RESULT
Arsenal 0 Chelsea 3
Chelsea: Willian (40'), Batshuayi (42', 49')
Getting%20there%20and%20where%20to%20stay
%3Cp%3EFly%20with%20Etihad%20Airways%20from%20Abu%20Dhabi%20to%20New%20York%E2%80%99s%20JFK.%20There's%2011%20flights%20a%20week%20and%20economy%20fares%20start%20at%20around%20Dh5%2C000.%3Cbr%3EStay%20at%20The%20Mark%20Hotel%20on%20the%20city%E2%80%99s%20Upper%20East%20Side.%20Overnight%20stays%20start%20from%20%241395%20per%20night.%3Cbr%3EVisit%20NYC%20Go%2C%20the%20official%20destination%20resource%20for%20New%20York%20City%20for%20all%20the%20latest%20events%2C%20activites%20and%20openings.%3Cbr%3E%3C%2Fp%3E%0A
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
More from Aya Iskandarani
General%20Classification
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if you go
Plan to boost public schools
A major shake-up of government-run schools was rolled out across the country in 2017. Known as the Emirati School Model, it placed more emphasis on maths and science while also adding practical skills to the curriculum.
It was accompanied by the promise of a Dh5 billion investment, over six years, to pay for state-of-the-art infrastructure improvements.
Aspects of the school model will be extended to international private schools, the education minister has previously suggested.
Recent developments have also included the introduction of moral education - which public and private schools both must teach - along with reform of the exams system and tougher teacher licensing requirements.
MATCH INFO
Inter Milan v Juventus
Saturday, 10.45pm (UAE)
Watch the match on BeIN Sports
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
UAE currency: the story behind the money in your pockets
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
UAE currency: the story behind the money in your pockets
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Dengue%20fever%20symptoms
%3Cul%3E%0A%3Cli%3EHigh%20fever%3C%2Fli%3E%0A%3Cli%3EIntense%20pain%20behind%20your%20eyes%3C%2Fli%3E%0A%3Cli%3ESevere%20headache%3C%2Fli%3E%0A%3Cli%3EMuscle%20and%20joint%20pains%3C%2Fli%3E%0A%3Cli%3ENausea%3C%2Fli%3E%0A%3Cli%3EVomiting%3C%2Fli%3E%0A%3Cli%3ESwollen%20glands%3C%2Fli%3E%0A%3Cli%3ERash%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3EIf%20symptoms%20occur%2C%20they%20usually%20last%20for%20two-seven%20days%3C%2Fp%3E%0A
Last-16 Europa League fixtures
Wednesday (Kick-offs UAE)
FC Copenhagen (0) v Istanbul Basaksehir (1) 8.55pm
Shakhtar Donetsk (2) v Wolfsburg (1) 8.55pm
Inter Milan v Getafe (one leg only) 11pm
Manchester United (5) v LASK (0) 11pm
Thursday
Bayer Leverkusen (3) v Rangers (1) 8.55pm
Sevilla v Roma (one leg only) 8.55pm
FC Basel (3) v Eintracht Frankfurt (0) 11pm
Wolves (1) Olympiakos (1) 11pm
COMPANY PROFILE
Name: Rain Management
Year started: 2017
Based: Bahrain
Employees: 100-120
Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20101hp%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20135Nm%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%20Six-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh79%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Read more about the coronavirus
THE%20SWIMMERS
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ESally%20El-Hosaini%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3ENathalie%20Issa%2C%20Manal%20Issa%2C%20Ahmed%20Malek%20and%20Ali%20Suliman%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
The specs: 2019 Mercedes-Benz C200 Coupe
Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km
Six tips to secure your smart home
Most smart home devices are controlled via the owner's smartphone. Therefore, if you are using public wi-fi on your phone, always use a VPN (virtual private network) that offers strong security features and anonymises your internet connection.
Keep your smart home devices’ software up-to-date. Device makers often send regular updates - follow them without fail as they could provide protection from a new security risk.
Use two-factor authentication so that in addition to a password, your identity is authenticated by a second sign-in step like a code sent to your mobile number.
Set up a separate guest network for acquaintances and visitors to ensure the privacy of your IoT devices’ network.
Change the default privacy and security settings of your IoT devices to take extra steps to secure yourself and your home.
Always give your router a unique name, replacing the one generated by the manufacturer, to ensure a hacker cannot ascertain its make or model number.
POSSIBLE ENGLAND EURO 2020 SQUAD
Goalkeepers: Jordan Pickford, Nick Pope, Dean Henderson.
Defenders: Trent Alexander-Arnold, Kieran Trippier, Joe Gomez, John Stones, Harry Maguire, Tyrone Mings, Ben Chilwell, Fabian Delph.
Midfielders: Declan Rice, Harry Winks, Jordan Henderson, Ross Barkley, Mason Mount, Alex Oxlade-Chamberlain.
Forwards: Harry Kane, Raheem Sterling, Marcus Rashford, Jadon Sancho, Tammy Abraham, Callum Hudson-Odoi.
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
