President Abdel Fattah Al-Sisi reviewed in a Sunday meeting with a group of ministers the latest updates regarding the economic reform programme, in which he stressed the necessity of keeping in mind the impact of these reforms on low-income citizens.
The meeting was arranged between the Central Bank of Egypt (CBE) governor Tarek Amer; the ministers of foreign affairs, interior, defence, finance, and supply; and the head of the General Intelligence and Administrative Control Authority.
The president said that the efforts carried out by various state bodies in controlling prices must be followed in order to ensure the provision of basic food commodities at affordable prices in markets. Al-Sisi also ordered that prices in sale outlets across Egypt continue to be monitored in order to maintain stability.
Al-Sisi’s meeting with these influential government figure heads comes after the International Monetary Fund’s approval of a three-year, $12bn loan agreement for Egypt, of which the country has already received the first tranche worth $2.75bn.
Some political parties and figures have criticised the IMF loan, especially its preconditions, believing that it will increase Egypt’s debts and will seriously impact the livelihood of low-income citizen. Others doubt the ability of the Egypt government to deal with the amount of the loan or to even face its terms and consequences.
Political and economic analyst Abdel Moniem Saeed told Daily News Egypt that taking the loan is important and it will act as a certificate of trust supporting Egypt’s economic reform programme. The loan and the reforms combined are expected to attract much needed foreign investment.
However, Moneim Saeed noted that the pound’s complete flotation will increase prices and deteriorate conditions for low-income citizens, adding that this is not a new problem and it is exacerbated by the lack of control on prices and traders.
It’s expected that the government will soon announce their plan regarding how the loan will be managed within the state, he added.
Regarding expectations for the state’s handling of the loan, he said that if the state uses the loan only to purchase products this will obviously harm the country and increase debts. Moneim Saeed suggested that they must work on development projects that would improve revenues and improve the economic conditions and reduce debts.
Egypt’s economy was severely impacted following the 25 January Revolution, as foreign investors either halted their work in Egypt or decreased their investments. This was compounded by a decline in production which impacted imports and decreased exports. Egypt’s US dollar resources were also impacted following the Russian aeroplane crash in October 2015, as many countries suspended direct flights to Egypt.