Report: Egypt reduces the lighting of its streets and squares to increase its foreign exchange reserves

With a view to local energy conservation and export, Egypt has found a solution to reduce the lighting of public squares in the country in the context of reducing hard currency reserves.

Despite these measures, many economists believed that an International Monetary Fund loan was inevitable to overcome this crisis, as Egypt is currently going through a critical period in terms of financial policy, as it tries, on the one hand, to control price increases. after reaching the annual inflation rate. On the other hand, it seeks to provide foreign exchange to exit the tunnel of the consequences of the Russian-Ukrainian crisis, and Cairo is currently negotiating with the International Monetary Fund for a new loan to support the country, which has a poverty rate of about 30% of the total population. , which exceeds Their number is 103 million people, according to “AFP”.

In this regard, Egypt has taken several measures, which it expects to implement, will allow parts to be provided, since the devaluation of the pound in March last year by about 17% ahead of the green paper, so that the selling price of the American exceeds 18 pounds at the time. , in addition to the fact that the Egyptian government recently approved a draft decision to rationalize electricity consumption, including “reducing the lighting of streets and public squares”, in order to ensure the amount of natural gas for “export”.

Hani Geneina, a lecturer at the American University in Cairo and an Egyptian economist, told AFP that “the Egyptian government needs to take ‘harsh reform measures’ over the next month and a half, which we will quickly take in the near future.” short term so we can save the dollar.” On top of that, a complete liberalization of the exchange rate, indicating that “the problem lies in the (monetary) policy itself”.

He considered it necessary to “accelerate the pace of negotiations with the IMF”, since Egypt had previously received a loan of $12 billion from the Fund under an agreement signed at the end of 2016, and two more loans in 2020 in the amount of $5.4 billion for the implementation of economic program and $2.8 billion to fight the Corona virus.

A report by London-based research firm Capital Economics said that “the length of negotiations with the IMF indicates that some officials are unwilling to comply with its demands and prefer to rely on support from the oil-rich Gulf countries.”

For his part, Egyptian President Abdel-Fattah El-Sisi last week decided to appoint the prominent banker Hassan Abdullah, who was a member of the political secretariat of the disbanded National Party during the era of the late President Hosni Mubarak. as acting governor of the Central Bank, replacing Tariq Amer, who was appointed advisor to the president. Although the reasons for Amer’s departure are not officially known, some local media reported that one of the reasons was “failure to reach an agreement with the International Monetary Fund.”

For his part, James Swanston, an economist at Capital Economics, explained that the value of “the Egyptian currency needs to be devalued again to bring the dollar to £25 by the end of 2024 to avoid the impact of external imbalances,” i.e. a shortage of foreign exchange, given that it “requires the industry’s producers to adhere to this change.”

Egypt announced in 2018 that it would become self-sufficient in natural gas, especially after hitting the production map for the giant Zor field, bringing production to almost seven billion cubic feet per day, making the sector promising as part of efforts to overcome the crisis.

In its electricity consumption rationalization statement, the Egyptian government indicated that the goal is to “achieve an additional surplus of, on average, about 1% of the volume of natural gas supplied to power plants during the year with the aim of exporting it and benefiting from hard currency”, emphasizing the “reduction of illumination of streets and squares”. Added to this is Tahrir Square, which cost around £60 million (about $4 million) to light during its development.

Source: AFP

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