Egypt’s prime minister on Sunday offered a detailed and daunting review of the challenges facing his country’s economy as it reels from the effects of the Russia-Ukraine war.
In a televised news conference, Mustafa Madbouli sought to reassure Egyptians that his Cabinet was doing everything it could to weather the crisis but did not shy away from sharing the magnitude of the country’s economic woes.
He spoke of a significantly higher import bill, the flight of $20 billion in “hot [foreign] money” and a halt of tourist arrivals from the two warring nations who normally account for a third of all Egypt's visitors. Significantly, he also listed a number of fiscal targets that Egypt hoped to achieve.
“It’s a crisis added to another crisis,” said Mr Madbouli, referring to the economic woes caused by the coronavirus pandemic from which Egypt was recovering when the war broke out in February.
“Uncertainty is prevailing and no one can tell what will happen tomorrow."
The most populous Arab nation with 103 million people, Egypt reacted swiftly to the fallout from the war by devaluing its currency by 14 per cent against the US dollar, banning the export of vital foodstuffs and adopting a costly stimulus package to support the economy.
In March, Egypt opened negotiations with the IMF on technical support and possible funding to help it weather the crisis. Mr Madbouli said on Sunday that Egypt and the IMF were expected to reach an agreement within a month.
The fallout from the war has added to the effects of the disruption to the global supply chain caused by the pandemic, he said.
President Abdel Fattah El Sisi, the architect and driving force behind Egypt’s ambitious economic reform, has described the fallout from the Russia-Ukraine war as “unprecedented”.
In a series of televised comments since March, Mr El Sisi has shared details of the impact of the war on Egypt and how it intended to handle it, including incentives to bolster the stock market and increase the private sector’s share of investment.
Mr Madbouli gave more details of the crisis on Sunday and even acknowledged some of the more serious challenges, such as the growth of the public debt.
He said Egypt, the world’s largest wheat importer, was currently buying the product on world markets at $435 a tonne, up from $270 before the war. Russia and Ukraine accounted for the majority of Egypt’s wheat imports — a total of about 13 million tonnes last year — forcing it to seek alternative sources.
More than 70 million Egyptians rely on cheap bread provided by the state under a subsidy card system catering for low and middle-income Egyptians. Bread, a staple for most Egyptians, is a politically sensitive food item in a country where nearly half of the population is under or hovering above the poverty line.
The government has kept the price of subsidised bread unchanged, despite the surge in wheat prices, and moved to control the price of free-market bread after it rose by 50 per cent in the immediate aftermath of the Russian invasion. It also has offered financial incentives to local wheat growers to ensure they supply the state with nearly six million tonnes during the continuing harvest season.
Mr Madbouli said Egypt planned to spend 130 billion pounds ($700 million) to absorb the direct effects of the war in the fiscal year starting on July 1; and another 335bn pounds to offset its indirect effects.
He said the private sector would account for 65 per cent of all investment in the country within three years, up from about 30 per cent at present. He said the government aimed to reduce total debt to 75 per cent of gross domestic product in the next four years from the current 86 per cent, and the budget deficit to 5 per cent from 6.2 per cent
Egypt wants to achieve a primary surplus of about 1.5 per cent of GDP in the current fiscal year, which would rise to 2 per cent over the next four years, he said.
“Thanks be to God, Egypt has been able to face the world crises of the past three years,” Mr Madbouli said. “We would have seen total collapse in many areas had it not been for the economic reforms we introduced.”
What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
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Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).