Abdel Fattah al-Sisi complains that social spending while the social bill is null

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Recurrently, the Egyptian government and its supreme head, Abdel Fattah al-Sisi, bear the governmental social spending responsibility for Egypt’s crippled economy. Many claims, however, are poorly established on fallacies.

For example, Sisi recurrently claimed the actual price of a litre of gasoline is 40 pounds or 2.1 dollars. But, the average cost of a litre of gas in the United States is 1.3 dollars, which is about 24 pounds only, keeping in mind there are taxes imposed on gasoline up to 10% of the price of one gallon. The same is suitable for European countries that charge high fuel taxes (up to 30%) to urge citizens to use public transportation. On the other hand, the government claims it subsidizes electricity while reviewing the governmental budget over the past three years reveals the electricity subsidy bill is zero. The 2022/2023 budget is likewise. Indeed, there are 17 million subscribers who pay less than 50% of the actual cost of their electricity consumption, but the government head ignores that subsidizing electricity in Egypt is reciprocal. The Ministry of Electricity supports the minimal consumers through the gains the ministry achieves from the higher consumers, who pay for the electricity at high market prices.

Likewise, the Egyptian head of government ignores that Egypt has a 25,000 megawatts surplus of electricity production. Therefore, there is no logic to raising prices and reducing electricity consumption considering the inability to export all of this surplus. On the contrary, the government ignores international standards when it comes to salaries. The minimum wage in Egypt is 2,700 pounds monthly, which is only 144 dollars, while the minimum wage in Germany is 1,620 euros (31.8 thousand Egyptian pounds), and in Belgium is the same. In comparison, New Zealand is 1,725 ​​euros (33.8 thousand Egyptian pounds), and Luxembourg is 2,250 euros (44,000 Egyptian pounds).

Although there is a general economic and political gap between those countries and Egypt, the Egyptian officials, including Sisi, used to compare Egypt to them, considering only the nominal price of some essential commodities and omitting the differences in wages, the purchase power parity and the quality of services. Moreover, the Egyptian government ignores the game of the international prices regarding the local wheat. Egyptian farmers were forced to supply wheat to the government at 5,500 pounds per ton, while the government had to pay 9 thousand pounds to get it from abroad. According to official figures, the Egyptian government must remember that over 30 million people are living below the poverty line in Egypt, including about 5 million who suffer from extreme poverty, meaning that they sleep overnight without food. This is the reality of what the country is going through, and the government must keep this in mind before waving the social spending card before criticisms.