News

• Price increase of medicines prompts divided opinions

  11 October 2016, 01:58 PM A 20% increase is not enough as it should be closer to 50%, says head of federation’s drug section The Ministry of Supply has increased its allocation to food commodity subsidies in an attempt to outpace the current inflation rate caused by the Egyptian pound’s devaluation. The ministry’s decision comes as part of a governmental plan to ease the economic burden on citizens, according to a source at the ministry. The value of the US dollar against the Egyptian pound appreciated to EGP 11 in the parallel market on Thursday, driven by high demand from importers and the erosion of foreign currency holdings, which have followed receding direct foreign investments, tourism revenues, exports, and remittances. The Egyptian government has issued about 20m subsidies cards, which provide food commodities to 80 million citizens across the republic, according to data from the Ministry of Supply. “The value of subsidy allocations will increase by 15% next month,” Minister of Supply Khaled Hanafy said on Sunday, in a televised interview. To circumvent the current pressures on food commodities, the government will pursue two measures, according to a source in the Egyptian cabinet. In the first instance, the Ministry of Supply will offset inflationary pressures by allocating additional funds to the subsidy programme. In the second instance, Armed Forces will sell food commodities to citizens from mobile outlets at prices 50% lower than the usual market value. The rate of inflation increased by 1.4% from February to March, according to Central Agency for Public Mobilisation and Statistics (CAPMAS). “Increasing subsidy allocations will put stress on the state’s budget,” said the former executive chairperson of the International Monetary Fund (IMF) Fakhry El-Fekky. However, the effect would be temporary until the economic situation improves and the pound gains strength against the dollar with the recovery of tourism and investments, he argued. The government’s move came a few hours after the president’s Sunday speech commemorating Sinai Liberation Day. Al-Sisi directed the government to increase subsidies to match the price hikes caused by the fluctuating price of the dollar against the pound.
  

• Government raises prices of medicine under EGP 30 by 20%

  11 October 2016, 01:54 PM Pharmaceutical companies have demanded the government increase the prices of medicine after the devaluation of the pound against the US dollar the cabinet agreed to raise the prices of medicine that costs less than EGP 30 by 20%, said Health Minister Ahmed Emad on Monday. During a press conference at the Council of Ministers, Emad said the decision to raise the prices means that companies are now required to provide these types of medicine in the market, which had previously been out of stock in many pharmacies. Emad noted that about 4,000 low-price medicines were unavailable in the market, as producing companies decided to halt their production influenced by the high manufacturing costs and low profit. Pharmaceutical companies have demanded the government increase the prices of medicine after the devaluation of the pound against the US dollar. The Pharmaceutical Industry Chamber in the Federation of Industries had warned that keeping the prices of medicine unchanged will lead to more medicine disappearing from the market. Emad said that several foreign pharmaceutical companies were forced to shut down on the back of the increasing production cost without a matching price increase. The health minister added that there will be strict controls on companies to prevent the exploitation of the decision, whether through excessive increasing of prices or raising prices of medicine not included in the original decision. According to data from the Pharmaceutical Industry Chamber, there are 154 factories operating in Egypt and 50 more under construction. The total volume of investment in the sector approaches EGP 45bn. The total annual sales of medicine in Egypt registered EGP 40bn in 2015, according to data from the chamber.