A cabinet statement has said that the government will exert greater control over retail shops in the coming period in order to ensure that basic commodities are available at fair prices. “The move is also meant to stand up to those who hoard and stockpile commodities to sell them on the black market and secure illegal gains and profits,” the statement said.

The step is the latest in a series taken recently by the government to keep a close watch on retail markets and commodity prices amid soaring prices. “We have recently noticed that there are big fluctuations in prices as well as unjustified hikes every now and then,” Prime Minister Mustafa Madbouli said, adding that “with a view to the global economic crisis gripping the entire world, including Egypt, it has become a high priority for the government to strike with an iron fist those who manipulate prices of basic commodities or stockpile them to achieve illegal gains at the expense of citizens.”

Madbouli said that from now on, watchdog and oversight bodies would set a deadline for all shops and retailers to start putting price tags on commodities on sale, with inspection tours to be carried out periodically to ensure compliance.

“Retail shops found guilty of stockpiling goods or selling them at inflated prices will be immediately shut down and goods confiscated, to be resold to citizens at low prices,” Madbouli said, adding that the government neither   wants retailers to lose money nor wants them to gain illegal profits at the expense of citizens.

Madbouli indicated that the Ministry of Supply and Internal Trade, the Ministry of Interior, chambers of commerce, and consumer protection societies will coordinate to make sure that there is price discipline on the retail market. “We will give retailers a grace period, after which watchdog bodies will move to impose the new procedures,” Madbouli said.

Madbouli met on Monday with Minister of Supply and Internal Trade Ali Moselhi to follow up on prices in retail markets.

Ibrahim Ashmawi, deputy minister of supply and internal trade, said that while Egypt has a surplus of all strategic commodities and goods, “the problem is that some retailers resort to exploiting economic crises to stockpile and hoard goods to create a gap on the market and then sell them at inflated prices. But the government will strike such greedy retailers with an iron fist and warns all those who fail to comply that they will be penalised and fined.”

This is the second time in one month that the Madbouli government intervenes to challenge stockpiling and monopolistic practices on the local retail food market. On 27 November, the cabinet issued a decree aimed at penalising vendors, retailers, suppliers, distributors, and merchants who stock up on rice with at least one year in prison and hefty fines. The decree, which will remain in effect for three months, came after several MPs complained that ordinary citizens had been unable to find rice on the retail market.

The cabinet’s decision led to easing some rice bottlenecks, especially after it allowed retailers to raise the price to LE18 per kilo.

Meanwhile, figures released by the Central Agency for Public Mobilisation and Statistics (CAPMAS) on 9 December show that urban consumer inflation in Egypt jumped from 16.2 in October to 18.7 per cent in November — the highest figure since recording 21.9 per cent in December 2017.

“The country’s monthly inflation rate rose by 2.5 per cent in November compared to October of this year,” the CAPMAS report said, adding that “vegetable prices rose by 7.8 per cent, dairy (cheese and eggs) by 5.5 per cent, and cereals and bread by 4.8 per cent, while the cost of fish and other seafood rose by 3.7 per cent and meat and poultry by 6.8 per cent.”

The Central Bank of Egypt (CBE) also said in a statement on 9 December that the annual core inflation rate recorded 21.5 per cent, the highest since 2016, compared to 19 per cent in October 2022.

A CBE statement noted that Egypt’s headline inflation has been accelerating by double digits since the outbreak of the Russia-Ukraine war in February.

The Egyptian pound lost 36 per cent of its value against the dollar in recent months after the CBE introduced two currency devaluations in 2022, announcing the adoption of a more flexible exchange rate at the end of October.

Economic expert Hani Geneina said in a TV interview that the global economic crisis triggered by the war in Ukraine and the Egyptian government’s new $3 billion loan deal with the IMF which led to devaluating the Egyptian pound and the introduction of a flexible exchange rate, pushed inflation rates and consumer prices to higher levels. “I think this will continue for some time, after which prices will stabilise, especially after the government obtains the first tranche of the IMF loan — $750 million,” Geneina said, indicating that “traders and retailers on the market sense that the government will receive the IMF loan very soon and that this will help stabilise the market, and so they want to make as much profit as possible now rather than when it becomes too late.”

Fakhri Al-Fiqi, head of parliament’s Budget Committee, also said in a statement on 8 December that though the deal with the IMF pushed inflation rates and consumer prices to higher levels, the loan will help shore up the country’s foreign exchange reserves, help stabilise the pound and hence keep inflation rates and consumer prices in check.

Madbouli met CBE Governor Hassan Abdallah on 12 December to review the government’s plan to shore up the country’s foreign exchange reserves in the long and short run. “This is necessary to tame down inflation rates and control prices,” Madbouli said.

MP Rehab Moussa said a shortage of hard currency and the government’s new policy of restricting imports led to a surge in consumer prices on the local market. “This led retailers and traders to manipulate prices to achieve illegal profits, and it was important that the government intervenes to stabilise the market,” Moussa said, affirming that “citizens, particularly poor and limited-income classes, have been feeling the pinch of the global economic crisis in the form of soaring inflation rates and high retail prices.

“But many believe that this is not due as much to the economic crisis as it is greedy retailers who moved to exploit the tough economic situation to manipulate prices in their favour.”

*A version of this article appears in print in the 15 December, 2022 edition of Al-Ahram Weekly