I pay careful attention to the upbeat remarks made by officials regarding the Egyptian economy. I am fully aware of the numerous reforms that are in progress and the notable advancements that have been made in a number of sectors. However, I also feel a great deal of fear and worry because of the soaring prices, which is a direct result of the absence of a comprehensive strategy for structural economic transformation and strategic plans to deal with the actual problems that people are facing.
The public’s response to the worsening economic conditions, which have left families unable to meet their fundamental requirements, is what disturbs me. Tragic tales of fathers unable to support their families or provide them the bare necessities and women screaming out because they are unable to feed their children are making their way around social media. The quality of life has drastically declined for pensioners, who are unable to earn more money, and they are now barely able to survive due to the excessive price increases that are currently in place.
Tragically, the growing trend in prices for all goods and services shows no signs of decreasing, which is quite anticipated. The cause is widely known: Egypt’s large trade deficit and the economy’s failure to attain self-sufficiency in goods and services, along with debt obligations that must be met on agreed payment schedules. These circumstances have resulted in an unparalleled devaluation of the local currency. Surprisingly, the state continues to applaud the patient Egyptian people for their willingness to bear the costs of reforms. Here, I must advise you against depending on this premise because we cannot foretell its future repercussions.
Scattered plans
In good faith, I ask: where is the comprehensive strategic plan to address the severe economic crises we are currently experiencing?
What we hear from politicians about increasing investment, attracting foreign capital, and banking and monetary restructuring are simply bits of a larger vision aimed at guaranteeing diversified sources of income so that the state may attain economic stability. However, these ambitious goals do not form a unified plan for the state’s actions aimed at restoring the prosperity of its people.
If we quickly examine the priorities of most countries, we will discover that meeting the basic requirements of all of its residents comes first. All economic duties are designed to achieve these goals first and foremost, before any other plans. While comprehensive state strategies may encompass dozens, if not hundreds, of goals, the primary shared objective is the provision of individuals’ basic needs, whether through production or services.
Swift response
Thus, I ask: what strategy is the state implementing to immediately curb the insane price increases for goods and services, making them once again affordable for all segments of society? Unfortunately, I see officials constantly treating symptoms rather than the disease itself, causing our situation to remain unstable and leading reform programs to fail quickly in the face of crises.
This issue is complex, but in this article, I will focus mainly on the insane price hikes and my view on what needs to be done immediately to address this catastrophe.
The primary cause of the present price increases is the rapidly rising foreign currency rate, which we rely on to import all our essentials. As a country with a high reliance on imports and low exports, Egypt has a significant trade deficit with the majority of its international trading partners. As a result, we are influenced by all external factors, including wars, pandemics, and disasters, and their impact on global prices.
Egypt, on the other hand, has reached a historically high level of debt, with external debt already totaling $153 billion and total domestic state debt approaching 5 trillion Egyptian pounds. These conditions have resulted in a significant drop in the value of the local currency versus the US dollar, from 8 pounds per dollar in 2014 to 18 pounds in 2016, and currently 48 pounds per dollar in 2024. This has resulted in unprecedented price increases across the country.
Multi-faceted strategy
Unfortunately, the situation will not improve in the short or medium term unless a national strategy is devised taking into account every detail, implementing all future decisions, and protecting against all expected domestic and global developments. A multi-faceted strategy, beginning with increased production to ensure food security and offering all health services at cheap costs to match the majority of the population’s living standards. A strategic plan that must take into account the restructuring of industry and services that can compete globally, which would, in turn, generate foreign currency inflows.
To be honest, we cannot simply blame the current administration for the country’s unstable economic policies, which have impeded steady progress. Egypt’s strategic planning has been inconsistent since the 1950s, with different administrations enacting fragmented policies and pursuing distinct goals. This has resulted in repeated setbacks, reducing the state’s competitiveness and generating a steady drop in the value of the local currency due to limited manufacturing capacity and increased reliance on imports. These measures have left the Egyptian economy unstable and vulnerable to external shocks.
In fact, a failure in strategic planning over the last 70 years has led us to where we are today, allowing newly founded nations to outperform us economically.
We are desperately seeking planning based on the state’s own resources. Egypt was previously a country that was self-sufficient in most of its primary needs, with plans focusing on providing the population’s basic needs using the country’s own resources. Back then, planning units researched present and future needs, predicted catastrophes, and planned accordingly.
Self sufficiency
In our current circumstances, gaining self-sufficiency in agricultural and livestock production by local means must be our number one objective. In my opinion, it is critical to provide all necessary assistance to the experienced private sector, farmers, breeders, and producers through a comprehensive plan targeted at meeting the basic needs that we currently import at a cost of billions of dollars.
We must increase local production of wheat, rice, corn, and other food processing industries, as well as establish a timeline for replacing imported food products with high-quality local alternatives, a goal that is both achievable and can yield quick results, allowing the state to regain control over unjustified food price increases, and urgently.
At the same time, we must boost pharmaceutical manufacturing, increase the number of private sector manufacturers to satisfy people’s prescription needs—whether for chronic or seasonal diseases—and stockpile vast quantities to avoid shortages. We should also prohibit the export of any medicine that does not meet local supply requirements.
Before repaying any debts, the state must devote all of its foreign currency resources to manufacturing, agriculture, animal production, pharmaceutical development, and healthcare service improvement. It seems sense to renegotiate with financial institutions for more facilities and grace periods, considering the high toll Egypt is paying as a result of the region’s acute tensions, which have made it impossible for the people to withstand more demands.
Prioritising basic needs
Sustainable strategies prioritise meeting people’s basic needs and services, whether by making the best use of local resources or by expanding into new regions, as seen in the UAE and Saudi Arabia’s expansion into Africa to secure future food supplies and natural resources.
The current global situation necessitates distinct priorities. Egypt has all of the ability to attain self-sufficiency and base its national revenue mostly on its own resources. However, currently, imports account for 70% of national output. We need immediate answers to rectify this inverted equation, or the economy and people will continue to drown.
Nobody denies that the government is trying relentlessly to attract foreign capital by liquidating significant state assets and launching major real estate projects. Unfortunately, they are only temporary measures to acquire foreign money for additional imports of essential necessities, compounding the issue as population growth drives up demand. The state must ensure that foreign currency is accessible to cover obligations and maintain a high financial rating.
Real solutions necessitate efforts in completely other areas, with a primary focus on treating the underlying cause of the issue. All state efforts must first be harnessed internally to use its resources to achieve the required output, ensure its growth, and hedge against disasters and crises as part of plans that keep everything under the state’s control, allowing it to protect its citizens’ interests.
Certainly, strategic planning for national growth and advancement extends beyond battling inflation and price increases. However, if the state had followed a strong strategic plan, it would not have encountered this problem in the first place.
Finally, I advise all Egyptian officials to take immediate action against rising prices and adopt alternative negotiation approaches with creditor institutions—approaches that do not impose any further losses on the people, as they have nothing left to lose.
