CAIRO (AFP) – An economic crisis is casting darkness upon Egypt’s streets, as the government dims lights to free up energy for export and bolster hard currency reserves.
The conflict in Ukraine had an immediate impact on Egypt, the world’s biggest wheat importer which has relied on the ex-Soviet states for over 80 percent of its grain.
Egypt, which turned to the International Monetary Fund for a loan after the war erupted, is pumping more natural gas abroad to increase its foreign currency reserves -- a move that has come in for criticism.
And while the government announced electricity rationing this month, signs of wastage elicit scorn.
“I see streetlights still working during daylight hours... and we’re suffering from high electricity bills,” said a disgruntled Cairo resident in his 30s who spoke on condition of anonymity.
The country’s vital tourism sector has also been hit by the Ukraine conflict, cutting the flow of holidaymakers to a country still hurting from the 2011 revolution and Covid-19 pandemic.
Economic growth slowed to 3.2 percent in the fourth quarter of 2021-22 against 7.7 percent last year, although annual expansion was 6.6 percent.
Despite the better-than-expected annual figure, the government said growth had tapered off in the wake of “global political and economic developments”.
Egypt’s monetary policy has been caught between a rock and a hard place since the war broke out in Ukraine in February.
Inflation hit a three-year high of 14.6 percent in July after Egypt devalued the pound, pushing up the price of imports and depleting forex reserves by $7.8 billion since February to $33.1 billion in July.