Egyptian President Sisi said on August 3rd that he would raise the price of government-subsidized bread, the latest in a series of austerity measures his government has taken in recent years aimed at overhauling the country’s economy.
Sisi was speaking at the opening ceremony of a food industry complex in Minuf province in the Nile Delta, Egypt’s Al-Jazeera newspaper reported.
The Associated Press reported on August 4th that Mr. Sisi did not provide further details on when and how much bread prices would rise, saying only that the increase would be used to feed about 13 million Egyptian schoolchildren.
Currently, 20 pieces of subsidized bread in Egypt are worth 1 Egyptian pound (about 0.15$), while a piece of bread on the general market typically costs between 0.5 Egyptian pounds and 1 Egyptian pound.
“It’s not reasonable to offer 20 slices of bread for a cigarette,” says Mr Sisi, whose price has not changed for 20 or 30 years and is unsustainable. ”
Mr. Sisi stressed that the Egyptian government would continue to subsidize the price of bread, but only by a smaller amount.
Mr. Sisi also said the government would need 8 billion Egyptian pounds ($3.2 billion) to pay for schoolchildren’s meals, raise the price of subsidized bread and cut budget allocations from ministries to absorb the cost. But Mr. Sisi did not give details of the budget cuts.
In addition, the Sisi government has begun to deal with other huge government subsidies, such as fuel subsidies, monitoring the country’s currency fluctuations and imposing value-added tax under the IMF loan program.
The government’s austerity measures have won praise from economists and business leaders, but the ensuing inflation has weighed heavily on ordinary Egyptians. Mr. Sisi is working on $45 billion in major projects, such as a new administrative capital, to revive Egypt’s economic conditions since the Arab Spring a decade ago.