Egypt's start of clearing the import backlog triggered the economic crisis.

Billions of dollars worth of goods have accumulated at Egyptian ports due to government measures aimed at conserving US dollars in the face of a currency crisis.

According to the dictator President Abdel-Fattah El-Sisi, Egypt’s banks will begin providing the dollars required to clear a backlog of imports accumulating at Egyptian ports in the coming days.

Egypt has been dealing with food, medicine, and household goods shortages as a result of its depreciating currency and a stronger US dollar.

Egypt requires US dollars to repay approximately $158 billion in foreign debt over the next few years, but it also requires foreign currency to fund its voracious appetite for imports.

In response to the crisis, Egypt’s government imposed several import restrictions, making it more difficult for businesses to obtain new dollars, including a rule requiring companies to obtain letters of credit for foreign purchases.

At the same time, economists are sceptical.

Simultaneously, economists suspect Egypt’s central bank has been dipping into its foreign currency reserves in an attempt to shore up the sagging pound.

As a result, imported goods have piled up at Egyptian ports, causing product shortages throughout the country.

Egypt’s Prime Minister Mostafa Madbouly stated that progress had been made in clearing the backlog, stating that approximately $5 billion in commodities had been released from ports in recent weeks, but that another $9.5 billion in goods remained stuck.

Egypt’s pound has taken a beating this year, losing nearly half of its value against all foreign currencies, particularly the US dollar. The war in Ukraine has hit Egypt’s import-dependent economy particularly hard.

Ordinary Egyptians have rushed to buy gold in order to protect their shrinking savings, prompting some analysts to warn of a gold price bubble.

The president’s remarks come as Egypt is expected to announce another currency devaluation, which will likely add to inflationary pressures.

Egypt, already the IMF’s second most indebted country, returned to the lender in October for a $3 billion loan. As part of the deal, the bank pressed Cairo to allow greater flexibility in its exchange rate.

The currency depreciation is intended to correct external imbalances, boost Egypt’s competitiveness, and attract foreign direct investment, but it has exacerbated price pressures felt by ordinary Egyptians.