Signs of economic stress in Egypt

Cairo, Egypt

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Thousands of Egyptians took to the streets in several cities across the country over the weekend in a rare show of dissent against the autocratic rule of president Abdel Fattah el-Sisi. This follows viral social media videos by a former government contractor alleging high level corruption and calling for demonstrations.

These may have been the catalyst, but there’s a bigger picture here.

Egypt is about to complete a three-year, $12 billion IMF programme – the centrepiece of an ambitious economic reform programme. This has seen the government push through a raft of measures to boost foreign investment.

By all accounts it’s been good for markets, with the likes of the IMF heaping praise on Cairo.

Less has been said about how ordinary Egyptians have fared.

An important part of reform has been harsh austerity, including subsidy cuts and the free-floating of the currency. This helped send inflation above 30% for much of 2016/17. With poverty estimated at 27.8% in 2015, the impact is unlikely to have been benign.

Throughout this Egyptians have been suspiciously passive. The protests, while small, are a reminder that not all is well.

And it looks like markets know it too. Egyptian stocks fell more than 5% on Sunday, the biggest drop since 2016.

With calls for more protests this week, this is one to watch.

This report reflects the views of the author alone, not those of How we made it in Africa.


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