Don’t believe “nonsense” about the economy, says Egyptian El Sisi

Egypt’s president on Monday warned Egyptians not to believe inaccurate information about the country’s deepening economic crisis, saying they should only listen to the government on the issue.

“Circumstances are very, very difficult,” President Abdel Fattah El Sisi said of the country’s economic woes, which he attributed to the Russia-Ukraine war and the preceding coronavirus pandemic.

The President’s comments came on the same day his administration announced an austerity package aimed primarily at addressing a months-long foreign exchange crisis.

The measures, published in the Gazette, include the indefinite postponement of yet-to-be-launched projects with a dollar component, restrictions on foreign travel by officials, and the suspension of imports of non-essential foreign goods and materials.

The decree did not specify which projects are to be postponed.

The package also includes spending cuts in local currency, including allowances for state employees, freezing attendance at local conferences without prior approval, and halting additional spending on leisure or sports activities.

An Egyptian fishmonger in the coastal city of Port Said, northeast of Cairo. Reuters

“Listen to us, not because we are more honest than others, but because we are more aware of the scale of the challenge than others,” Mr El Sisi said in televised commentary during a ceremony for an alliance of local NGOs.

He said that attempts by ordinary people to discover or interpret aspects of the economic crisis, while not intentionally harmful, nonetheless “create confusion and deepen people’s anxiety.”

Rumors abound in Egypt, some of which have circulated on social media, about the economic situation and what Mr El Sisi and his government are doing to bring the country of 104 million people out of the crisis.

Chief among them was an unfounded rumor of wholesale privatization of state assets, including the Suez Canal, the strategic waterway that is a revered symbol of Egypt’s anti-colonial struggle.

Others speak of widespread bribery and the futility of some new major infrastructure projects personally overseen by Mr. El Sisi.

“Have we gotten into a war where we squandered government money? Have we embarked on adventures using government money? Enough with the nonsense,” said Mr. El Sisi.

A nighttime view of central Cairo, the Egyptian capital of around 20 million people, which has been hardest hit by the economic crisis. AFP

The notion that state funds are wasted on “adventure” is often cited in relation to Yemen’s civil war in the early 1960s, when Egypt’s Arab nationalist leader Gamal Abdel Nasser sent troops to fight on the Republican side against royalists.

The suspension of projects that have yet to break ground follows a wave of criticism of the numerous mega-projects Mr El Sisi has launched since he took office in 2014. Some of these projects have been called unnecessary, anachronistic or extravagant by critics, who have claimed that the money could have been better spent on sectors such as health and education.

The President and his administration have defended them, saying they have created millions of jobs and made up for decades of neglect and stagnation.

Meanwhile, the Egyptian pound has been devalued three times in the past year, keeping the contested currency’s value at around 27 to the dollar, down from 16 a year ago. The flexibility of the foreign exchange mechanism helped secure a $3 billion International Monetary Fund loan that was approved last month.

Inflation is nearing the 20 percent mark and the foreign exchange shortage has hit imports hard, creating shortages and crippling industries dependent on foreign materials.

Updated January 9, 2023 5:37 p.m