Egyptian Prime Minister Mostafa Madbouly held a press conference on Monday, on the sidelines of his tour to inspect agricultural, industrial and technological projects in Beheira and Alexandria governorates.
Madbouly said that reducing the US dollar gap is Egypt’s “chronic disease,” explaining: “Our import bill is always greater than our exports, our resources are less than our consumption of hard currency, and as a result we are always exposed every once in a while to a crisis, an economic crisis, and measures are taken to liberalize the exchange rate.”
Without achieving balance regarding the country’s resources of hard currency and consumption, the Prime Minister warned this challenge will continue to exist.
He pointed out that the subsidy bill next year will increase to LE 636 billion, an increase of 20 percent over the current year.
Subsidies
The Prime Minister spoke about increasing the prices of subsidized bread, electricity, and petroleum products, noting that a study is underway on how to govern subsidies and develop the best scenario by the end of 2024.
Bread prices
Madbouly said that subsidizing bread exceeds LE 100 billion, noting that Egypt produces 100 billion subsidized loaves annually and sells one for five piasters.
There must be an increase in the price of bread, he said, but the bread will remain subsidized by the government, explaining: “Bread will remain subsidized, but there must be a movement commensurate with the terrible increases occurring in the price of bread.”
Electricity prices
Madbouly revealed that he assigned the Minister of Electricity to develop a new plan to gradually increase electricity prices for a period of four years.
He explained that the plan to move the new electricity prices would maintain support for the lowest tranches of consumption, adding that: “The state cannot bear this support bill forever.”
Petroleum products
The Prime Minister also revealed that the state has developed a plan in a gradual manner to achieve a balance in the prices of petroleum products by the end of 2025, stressing that diesel will remain subsidized even after 2025.
Cash support
Madbouly said that the government is following up on rumors about converting commodity support to cash support, adding that this opinion needs to be studied and the national dialogue will help in this regard.
He continued: “By the end of 2024, there must be visions for converting support into cash according to controls, and if consensus is reached, it will be implemented from the fiscal year 2025/2026.”
