Egypt’s President Abdel-Fattah El-Sisi said on Sunday that the government is attempting to combat the current price hikes on the private market by creating a parallel commodity market mechanism which will not be based on "excessive profits."
In his interview with the editors of country’s three state-owned newspapers - Al-Ahram, Al-Akhbar and Al-Gomhoriya - El-Sisi discussed the inflationary impact of the decision last November to float the local currency on the public, adding that he aims to implement policies to regulate the market – without breaking the law – to lessen the suffering of the people.
“This is not a return to socialism,” El-Sisi said, but stressed that he “won’t leave people hostages to the free market mechanisms.”
Under the rule of the nationalist president Gamal Abdel-Nasser in the 1950s and 1960s, the government set prices on all essential goods , a system that lasted until the early nineties.
"When the [economic] system changed to become profit-oriented only, some negatives appeared and then accumulated."
This created a need for economic reforms, including the liberalisation of the exchange rate, El-Sisi said.
“The current value of the dollar is not its fair price -- the fair value will be reached within six months -- when the exchange market stabilises," El-Sisi explained.
The stabilisation of the dollar price will have an effect on all commodities, El-Sisi explained, “since 60 to 70 percent of the products we consume are imported using hard currency."
"We are trying to combat price [increases]; we imported goods before floating the pound and these won't be sold at the current rate of the dollar," El-Sisi stated.
As of Monday, the average US dollar rate is EGP 18.5, compared with 8.88 pounds to the dollar prior to the flotation.
El-Sisi also spoke about some of the economic the projects undertaken by the army "using its own budget without burdening the state's general budget…in efforts to preserve the national pride and dignity...of the Egyptian people."
The projects, El-Sisi said, include a cement factory, fish farming and the importing of large quantities of cattle to provide meat at reasonable prices.
"The army has built-up its economic capabilities over many years; for the last three-and-a-half-years, the armed forces haven’t used any money from the general budget to buy its weaponry."
Since El-Sisi's inauguration in 2014, the army has acquired a number of French mistral carriers and German submarines.
El-Sisi also discussed with the editor-in-chiefs the current shortages and crisis in medicine since the flotation of the pound.
He explained that on 30 June he would inaugurate a new medicine factory that has been under construction for the past three-and-a-half-years.
The factory, El-Sisi explained, would produce medicine for chronic diseases, including insulin for diabetes, that have until now been imported using hard currency.
He also that a factory for the production of baby formula would also open in the next six to seven months to replace the imported products that have increased substantially in price since the flotation of the pound.
El-Sisi also discussed developments in the construction of new administrative capital, saying he would lay the foundation stone for the project in the upcoming weeks.
He said that the budget for the current national megaprojects, including major roads and cities nationwide, will cost EGP 1040 billion, not EGP 1400 billion as initially estimated.