The rate of unemployment in Egypt has made successive jumps since the beginning of this year, as official statistics announced a recent high unemployment rate due to the corona pandemic and the resulting loss of many jobs.

According to the Central Agency for Public Mobilisation and Statistics in August, the unemployment rate in Egypt jumped during the second quarter of this year to 9.6 per cent of the total workforce, compared to 7.7 per cent in the first quarter of this year.

The statement said that the rise in the unemployment rate came due to the repercussions of the new coronavirus pandemic and the government decision to take precautionary measures, including suspending schools, suspending air traffic, partially closing shops, and prohibiting transportation during night hours. According to the agency’s data, the unemployment rate increased by 1.9 per cent during the second quarter of the year (April to June) compared to the first quarter, and it increased by 2.1 per cent from the same quarter of the previous year.

High unemployment rate

The Central Bureau of Statistics announced last May that Egypt’s unemployment rate had risen to 9.2 per cent of the total workforce during April, referring to the precautionary measures taken by the state to limit the coronavirus. The estimate of the workforce power during the second quarter of the year recorded 26.7 million individuals, compared to 29 million individuals during the previous quarter, a decrease of eight per cent. The statement added that the number of unemployed registered 2.6 million unemployed, or 9.6 per cent of the total workforce (1.9 million males and 640,000 females) in the second quarter of this year compared to 2.2 million unemployed in the first quarter of this year, an increase of 338,000 unemployed.

The number of unemployed increased by 480,000 during the second quarter of the year compared to the same period last year, at a rate of 22.9 per cent. Wholesale and retail trade activity lost the most workers at 624,000 workers during the second quarter of the year. The statement said that manufacturing lost 569,000 workers, food and accommodation services lost 469,000 workers, the transport and storage business lost 309,000 workers, and construction and building lost 288,000 workers during the second quarter of 2020.

Unemployment in Egypt

The unemployment rate has increased dramatically during the past few months, coinciding with the government’s decision and instructions of Abdel Fattah al-Sisi to stop building permits and prevent the construction of any new buildings until early next year. The decision had terrible repercussions for thousands of workers and contractors associated with professions related to construction and finishing, who recently lost their jobs and joined the ranks of the unemployed. The minister of tourism announced that losses in the tourism sector are estimated at $1 billion per month, due to the suspension of tourism activity as a result of the suspension of travel and air traffic due to the spread of coronavirus. While the Egyptian Centre for Economic Studies expected that the Egyptian tourism sector would be affected by the outbreak of the coronavirus, and the loss of 35 per cent of tourism revenues estimated to be achieved in the Egyptian budget for the year 2019-2020, equivalent to $6 billion.

Long slump

According to official figures, Egypt needs new job opportunities that reach one million annually, to accommodate the graduates to the labour market, whose numbers range between 650,000 to 750,000 graduates every year. These numbers, in addition to structural unemployment accumulation, occurred due to the prolonged stagnation in the business environment, according to what was announced by Asaad Alem, Country Director for Egypt, Yemen and Djibouti and the World Bank. The government may have no other choice but to stimulate investments and job creation, which involves increasing aggregate demand or investments targeting specific sectors. The high unemployment rate in Egypt coincides with the end of governmental employment, and layoffs of employees and workers in many factories and companies. The IMF stipulated that the number of workers in the state’s administrative apparatus should be reduced, despite the suffering of many sectors from the terrible deficit in the number of employees and workers, especially in health and education.