Students study for their high school certificate exams at the Library of Alexandria during the rolling electricity power cuts introduced by Egyptian authorities to compensate for a shortage of fuel for its power stations. Reuters
Students study for their high school certificate exams at the Library of Alexandria during the rolling electricity power cuts introduced by Egyptian authorities to compensate for a shortage of fuel for its power stations. Reuters
Students study for their high school certificate exams at the Library of Alexandria during the rolling electricity power cuts introduced by Egyptian authorities to compensate for a shortage of fuel for its power stations. Reuters
Students study for their high school certificate exams at the Library of Alexandria during the rolling electricity power cuts introduced by Egyptian authorities to compensate for a shortage of fuel fo

Egypt's energy crisis unleashes rare wave of criticism


Hamza Hendawi
  • English
  • Arabic

Exacerbated by scorching summer temperatures, Egypt’s rolling power cuts have unleashed a wave of criticism of the government on social media with a fearlessness unseen since President Abdel Fattah El Sisi took the helm 10 years ago.

The criticism has caused a flood of posts on pro-government accounts with messages that vary between praise for Mr El Sisi’s leadership and achievements and stern warnings against action that could bring instability.

They also called for unity in the face of national security threats posed by conflicts raging in Egypt’s neighbours and explained the criticism away as part of a malicious campaign of rumours.

The power cuts have hit a sector long touted by Mr El Sisi and his government as a success story.

In 2018, Egypt and German giant Siemens said they had added 14.5 gigawatts to the power grid by upgrading power plants and building new ones, in a record-breaking two-and-a-half years.

That alone is more than half of Iraq's electricity production capacity, but it is failing to meet soaring demand.

In a nation where 30 per cent of its 106 million people live in poverty, according to official figures, the power cuts have deepened the suffering of millions struggling in the face of skyrocketing prices, a plummeting currency and reduced state subsidies on goods and services.

“Whoever wants to destroy his nation because of the price of gas, bread and milk should not worry because these items will be available free of charge in refugee camps,” declared one post from a pro-government Facebook account, echoing often repeated comments by Mr El Sisi that instability would plunge the county into chaos.

West Cairo natural gas electrical power station in the skyline of Giza, the twin city of Egypt's capital. AFP
West Cairo natural gas electrical power station in the skyline of Giza, the twin city of Egypt's capital. AFP

The criticism on social media has gone beyond frustration over the power cuts and even economic woes, touching on the wider question of how Egypt has been ruled since the military seized power in a 1952 coup.

“The people have been harvesting non-stop defeats, political, economic and civilisational setbacks since the republic was founded in 1953 and that’s because of one key reason: The absolute powers of presidents,” Anwar El Hawary, possibly the most outspoken of all government critics on social media, wrote on Facebook.

Some of Mr El Sisi’s supporters have joined the critics in vilifying the government, but with the important caveat that it is Prime Minister Mostafa Madbouly and his cabinet to blame, not the president, although he has supreme power.

Legislator Mustafa Bakry, a television talk show host and a staunch supporter of Mr El Sisi, has been at the forefront of efforts to discredit the critics while absolving the president of any responsibility.

His argument is partially founded on the notion that Mr El Sisi, a former army general who runs the economy down to the smallest detail, has not received the help he needs to translate his vision into action.

“The [Egyptian] people can only endure so much and had it not been for their faith in the political leadership [Mr El Sisi] they would not have remained silent,” said Mr Bakry.

“We have a skipper [Mr El Sisi] who is a patriot. You can say whatever you want but he has been unlucky, surrounded by challenges and problems from every direction while only a handful of people are sincerely lending him a helping hand.”

People cool off by the River Nile at night during high temperatures in Cairo, Egypt. Bloomberg.
People cool off by the River Nile at night during high temperatures in Cairo, Egypt. Bloomberg.

Speaking at an Egypt-EU investment conference in Cairo on Saturday, Mr El Sisi also appeared to be absolving himself and his government of responsibility for the economic crisis. He cited the Covid pandemic, the Russia-Ukraine war and the Gaza conflict as the main contributors to the country’s financial woes.

The furore over the power cuts is being played out against a backdrop of a severe economic crisis – some say it is the worst in memory – that critics chiefly blame on what they say is reckless borrowing, high spending on mega infrastructure projects that are unnecessary or could have waited given the dire state of key sectors like health and education.

Mr El Sisi says the new infrastructure, including thousands of kilometres of motorway, is vital to maintain economic momentum in the coming years.

The Egyptian pound has lost two-thirds of its value since early 2022. Servicing the country’s foreign debt, which stands at $160 billion, or over three times government revenue, eats up much of the country’s foreign currency earnings.

A bailout package worth about $50 billion from the IMF, World Bank, the EU and Gulf nations saved the country from a complete meltdown this year.

On Saturday, European companies declared their intention to sign deals potentially worth more than $42.85 billion, according to European Commission President Ursula von der Leyen. But the implementation timeline for these investments is uncertain.

It is unclear why authorities have so far tolerated the more outspoken posts by government critics. One explanation gaining traction is the government had no choice but to allow critics to vent, to prevent popular discontent from boiling over into unrest on the streets.

A greengrocer at his Cairo market stall. EPA
A greengrocer at his Cairo market stall. EPA

A shortage of diesel and natural gas to run the country’s power stations at full capacity is behind the electricity crisis.

The government had argued that the power cuts – lasting three hours a day but reportedly twice as long in some places – save the treasury hundreds of millions of dollars that would have otherwise been spent buying diesel and natural gas for power stations.

Egyptians have been asked to endure the power cuts for the good of the nation. The cuts, which began a year ago, initially lasted an hour and were later extended to two. Last week, the cuts were increased to three hours, coinciding with one of several heatwaves.

Mr El Sisi has repeatedly defended the cuts as a small sacrifice, warning that Egyptians will have to pay twice or three times what electricity is costing them now if they want uninterrupted power.

However, many Egyptians saw the cuts as an inexplicable and inexcusable dereliction of the government’s duty to deliver a basic service.

The prime minister, meanwhile, recently told Egyptians they should consider themselves lucky because other countries in the region suffered much longer cuts.

His comments were widely interpreted as insensitive, but his tone changed dramatically after the state-controlled media last week reported that the president had ordered the government to end the electricity crisis.

“The subject of electricity is very sensitive to us as officials because we empathise with the people’s suffering regardless of how long the power cuts last,” he told a nationally televised news conference after apologising to Egyptians.

Egyptian President Abdel Fattah El Sisi. UAE Presidential Court.
Egyptian President Abdel Fattah El Sisi. UAE Presidential Court.

“We were all sad to take the decision to extend the power cuts to three hours … our overwhelming concern now is to get through this crisis,” said Mr Madbouly, who took office six years ago.

Mr El Sisi was full of praise for Egyptians on Saturday, commending them on their perseverance.

“Egyptians are a strong and steadfast people who faced huge challenges that were absolutely not of their making,” he said.

“I would like to greet every Egyptian, man and woman, who are recently enduring life's hardships and rising prices,” he said in an address on Sunday.

Critics, meanwhile, are taking issue with the president’s decision to keep Mr Madbouly as prime minister after he dismissed the government nearly four weeks ago.

“What worries me the most is the narrative adopted by the official media that the new government will be an extension of the outgoing one and that it must build on the same policies and the successes already achieved,” said Ziad Bahaa El Deen, a former deputy prime minister who was in charge of the economy.

“If we are convinced that the management of the economy in recent years was successful and that it’s imperative, even necessary, to build on its achievements, then there is no hope for economic improvement.”

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Women:

55kg brown-black belt: Amal Amjahid (BEL) bt Amanda Monteiro (BRA) via choke
62kg brown-black belt: Bianca Basilio (BRA) bt Ffion Davies (GBR) via referee’s decision (0-0, 2-2 adv)
70kg brown-black belt: Ana Carolina Vieira (BRA) bt Jessica Swanson (USA), 9-0
90kg brown-black belt: Angelica Galvao (USA) bt Marta Szarecka (POL) 8-2

Men:

62kg black belt: Joao Miyao (BRA) bt Wan Ki-chae (KOR), 7-2
69kg black belt: Paulo Miyao (BRA) bt Gianni Grippo (USA), 2-2 (1-0 adv)
77kg black belt: Espen Mathiesen (NOR) bt Jake Mackenzie (CAN)
85kg black belt: Isaque Braz (BRA) bt Faisal Al Ketbi (UAE), 2-0
94kg black belt: Felipe Pena (BRA) bt Adam Wardzinski (POL), 4-0
110kg black belt final: Erberth Santos (BRA) bt Lucio Rodrigues (GBR) via rear naked choke

RESULTS

2pm: Maiden Dh 60,000 (Dirt) 1,400m. Winner: Masaali, Pat Dobbs (jockey), Doug Watson (trainer).

2.30pm: Handicap Dh 76,000 (D) 1,400m. Winner: Almoreb, Dane O’Neill, Ali Rashid Al Raihe.

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4.30pm: Handicap 64,000 (D) 1,950m. Winner: Sa’Ada, Fernando Jara, Ahmad bin Harmash.

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
UAE SQUAD

Khalid Essa, Ali Khaseif, Fahad Al Dhanhani, Adel Al Hosani, Bandar Al Ahbabi, Mohammad Barghash, Salem Rashid, Khalifa Al Hammadi, Shaheen Abdulrahman, Hassan Al Mahrami, Walid Abbas, Mahmoud Khamis, Yousef Jaber, Majed Sorour, Majed Hassan, Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Khalil Al Hammadi, Fabio De Lima, Khalfan Mubarak, Tahnoon Al Zaabi, Ali Saleh, Caio Canedo, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri

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Rating: 4 stars

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Second leg

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Games on BeIN Sports

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The Kites

Romain Gary

Penguin Modern Classics

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Our legal consultants

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Updated: July 01, 2024, 11:07 AM