The iPhone 15 was recently released on the American market at a maximum price of $1,099, equivalent to EGP 33,954. The price is still high compared to the income of most Egyptians, but far less than EGP 100,000!
World of Statistics, a research website affiliated with Georgia State University, conducted a study to see how much of a monthly salary citizens of different countries should expect to pay for an iPhone 15 Pro Max.
Egypt ranked first in 11 countries, including such troubled economies as Pakistan, Nigeria, Iran, and Argentina.
According to World of Statistics, an Egyptian citizen would need to pay 821 percent of their monthly salary to afford an iPhone 15 Pro Max.
The question here is not only about Apple products, which are typically pricey worldwide, or inflation, which reached a peak of nearly 40 percent in August, but unfair pricing, which has become so normalized in Egypt that Egyptians take the high prices for granted.
"Prices are going crazy nowadays, especially the prices of goods. Items like milk and eggs are rising steadily, let alone meat," Soha, a middle-aged housewife, said.
"Dining out was a fun monthly option for the family. With the jump in prices of many chain restaurants, it has become a far-fetched luxury. Also, ride-hailing car services are almost the only decent options for just a family trip, but their rates have become insane," Karima, a young Egyptian woman, complained.
In September, President Abdel-Fattah El-Sisi announced a series of measures to ease the financial strain on citizens, including raising the minimum wage for public sector employees from EGP 3,500 to EGP 4,000.
The minimum wage has increased since 2011 and four times in 2022 and 2023 alone.
Since March 2022, the Egyptian pound lost nearly half its value against the USD. The greenback is now traded at EGP 30.96, according to the Central Bank of Egypt.
The below graph shows the history of the minimum wage in Egypt in both the Egyptian pound and the US dollar.
The exchange rate is calculated to match the dates of each increase, showing the decline in the pound's value.
Egypt's inflation is expected to average 32.3 percent in 2023, after averages of 5.2 percent and 5 percent in 2021 and 2020, according to the World Bank.
Why are food prices increasing?
In August, food and beverage prices recorded a monthly inflation rate of 2.2 percent. However, the price of vegetables rose even faster, increasing 24.4 percent in August, up from 5.5 percent the previous month.
Year-on-year, food and beverage prices soared 71.9 percent. Housing and restaurant services have also inflated by 49.5 percent annually.
"There may be some exaggeration in food basket prices due to vendor practices. However, given the various factors at play here, such an aspect is unmeasurable. The state does its part in controlling the market and fights any price manipulation through its consumer protection bodies," Medhat Nafei, former advisor to the Minister of Supply and Internal Trade, told Ahram Online.
"Among the factors that inflate vegetable and fruit prices in Egypt are the decline in supply due to the limited agricultural area and the water scarcity. Also, other crops have become preferable owing to greater demand or profitability to increase exports and secure foreign currency," Nafei added.
"For instance, due to the war in Ukraine, Egypt incentivized farmers to grow and supply more wheat to make up for the import shortage, which affected crops like beet, contributing to two-thirds of the sugar production in Egypt," The former supply minister advisors stated.
In April, the Egyptian government announced the increase of the local wheat procurement price by 20 percent to EGP 1,500 per ardeb (150 kg) for the current harvest season to incentivize farmers to sell to the state.
Egypt secured only 3.8 million tons from local farmers in the April-September season out of the 4 million tons targeted.
To tackle the crop supply shortage, Nafei suggested that the government be more strategic and have a clear agricultural policy to determine which crops are most needed in the market and direct cultivation accordingly.
"That should happen by giving farmers more incentives and financing through state-owned bodies like the Agricultural Bank of Egypt," he said.
Are cars overpriced?
Cars are another example of an overpriced commodity in Egypt, whose prices ballooned in the past months. At the same time, sales dropped by nearly 70 percent in the first half of 2023 compared to the same period last year, according to the Automotive Information Council (AMIC).
"The US dollar, or the lack thereof, is the key to the surge in car prices in Egypt. Overpricing -- although I prefer not to use the term -- already exists. Still, it is caused by a real imbalance between supply and demand," commented Khaled Saad, secretary-general of the Egyptian Automobile Manufacturers Association.
"The limited supply is disrupting the market, and the solution could be relying on a currency other than the US dollar for foreign exchange, such as through cooperation with the BRICS bloc," Saad explained.
He advocated for developing a robust auto industry in Egypt through government and private sector collaboration.
In June 2022, the country launched a national strategy for localizing the automotive industry. The strategy aims to establish Egypt as a main gateway for emerging vehicle markets in Africa and to build strong commercial and investment relations with regional trade partners to ensure sustainable development for all sides.
The strategy also includes the Egyptian Automotive Industry Development Program (AIDP), intended to expand existing assembling and manufacturing capacities and encourage new investments in this sector.