Last Update 15:7
Wednesday, 15 July 2020

Coronavirus or hunger: Workers in Egypt’s vast informal economy struggle to survive as pandemic bites

Many workers in Egypt who survive on day wages are struggling to feed their families amid the coronavirus crisis

Ayat Al Tawy , Tuesday 7 Apr 2020
Attaba square
Attaba square in the centre of the Egyptian capital Cairo almost empty on March 25, 2020, before Egyptian authorities imposed a two-week night-time curfew as a measure against the COVID-19 coronavirus pandemic. (AFP)
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Mahmoud Fathy and his fellow vendors at Cairo’s major Attaba street market usually look forward to this part of the Islamic calendar, when business surges ahead of the holy month of Ramadan. But this year, they are wondering how they will survive, given the recent emergency measures that have cut into their livelihoods.

Fathy, a 36-year-old father of three, is now out of work, after authorities moved late last month to shut down the market, located in the heart of the city centre, as part of drastic steps to curb the spread of the coronavirus.

“For three weeks now, not a single pound has entered my pocket,” said the men’s clothes seller as he stands guard next to his covered rack in the now-deserted market. “We all live day-to-day here. The day I don’t work, I borrow [money] to cover my kids.”

The once-teeming market is home to thousands of street vendors who hawk everything from clothes and plastic wares to toys and kitchen items. They are among the millions of workers who toil in the country’s vast informal sector, where they have no social benefits or labour protections.

Egypt’s economy was fragile even before the advent of the coronavirus in February, although efforts to rebuild it were ongoing after years of unrest following the 2011 uprising. But the outlook now is far grimmer as government efforts to combat the pandemic stifle economic activity.

And those living precariously in the informal economy are the most vulnerable. They live hand-to-mouth, with little or no savings, and without a financial safety net.

Informal workers make up over 63 percent of the country’s estimated 30 million employed population, according to the International Labour Organization. Egyptian officials say the sector generates nearly 40-50 of the country’s economic output.

"The impact is huge on these businesses," said Mohamed Abu Basha, head of macroeconomic analysis at EFG Hermes. "Whether in case of partial or full closure, consumer behaviour has changed and demand has been affected given the current environment of reluctance and movement restrictions."

Egypt
Abandoned stalls at Cairo's Attaba market shortly before a night-time curfew started, 6 April 2020 (Photo: Ayat Al-Tawy)

No income

The two months leading up to Ramadan are usually a peak season for vendors in Attaba when they make double or triple their average daily takings of EGP 70-100 ($4.50-6.30). It’s the time of the year when they pay wholesalers, or settle their debts.

But now, with no income coming in, they are struggling to find enough to feed their families.

“We used to eat chicken or meat once a week. Since all this started, we haven’t had any. I no longer eat until I’m full, to leave food for the kids. I have stopped buying fruit,” said Fathy, who has a law degree.

“Shall we die of hunger or of the coronavirus?” he asks.

Egypt has steadily stepped up measures to contain the outbreak in recent weeks, closing air traffic and declaring a night-time curfew that has shuttered restaurants, shops and other businesses.

Authorities have scrambled to put together emergency aid packages to help those affected by the shutdown.

President Abdel-Fattah El-Sisi has allocated EGP 100 billion ($6 billion) to a plan to soften the economic impact of the virus, and the government is offering EGP 500 cash handouts for a period of three months to non-regular workers, and paying wages for those laid off as a result of restrictions on businesses and movement.

Some 1.5 million irregular workers have so far registered on the website of the Ministry of Manpower, and a government committee is assessing if they are eligible.

Fathy has already applied for the aid but has not received the money. And for many others, the grant, if they manage to get it, will do little.

“Even if I registered and received [the money], how long would it last -- a few days?” said Osama, 29, who has sold t-shirts from his street stand for 11 years and provides for his elderly parents. In normal times, he earns EGP 3,000 a month.

And even with the online system, the government still faces a daunting task of reaching irregular workers.

Market guard Mohamed, 45, who does not use the internet and had sold his mobile phone for some extra cash, had not heard about the online application.

Non-profit organisations, meanwhile, have handed out boxes of staple goods to many of those in need, but the measures are little more than a stopgap.

FILE PHOTO: A woman walks past a closed shop following the spread of coronavirus disease (COVID-19),
FILE PHOTO: A woman walks past a closed shop following the spread of coronavirus disease (COVID-19), in old Islamic Cairo, Egypt, March 27, 2020. (Reuters)

Adding to pressure

The predicament of the Attaba vendors is replicated throughout the North African country, where about 32.5 percent of the Egyptian population is currently living below the poverty line, or at around $1.45 per day, and millions of others are vulnerable to sinking into poverty.

The International Labour Organization said last month the impact of the coronavirus crisis will push millions around the world into unemployment and poverty.

“Working poverty is expected to increase significantly, as the strain on incomes resulting from the decline in economic activity will devastate workers close to or below the poverty line,” it said.

Sayed Magdy, a 54-year-old construction worker who has done wall and floor work for decades, said he was less worried about contracting the virus than he was about the financial effects of the pandemic.

His business has already cratered, and his work is down about 50 percent from two weeks ago, and still falling.

He travelled to a Red Sea resort hotel last week where he was supposed to carry out a two-week job. “But they asked us to leave after only two days after a coronavirus case was detected at a nearby resort,” he said.

Economist Abu Basha believes irregular workers in the construction sector will be particularly hurt by dwindling demand and strained liquidity.

Others think the full impact of the unfolding crisis on casually-employed workers remains unclear.

"We don't know when the situation will stabilise or until when the emergency measures will last," notes Mai Kabil, an economic researcher at the Egyptian Initiative for Personal Rights. “But the informal sector is often faster to recover.”

The situation for Shaimaa is far bleaker. The cleaning lady, who lives in a wooden shack in Qalioubiya, north of Cairo, had to sell her fridge, television and bed after she ran out of food and her landlord wanted her family to leave over unpaid rent.

"After the virus came, everyone is now afraid to let us in [their homes]," the single mother of three said. She has worked for just a single day in the past two weeks.

"We are now sleeping on a [bamboo] mat and a blanket," Shaimaa said.

"My life has been destroyed because of the coronavirus."

 

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