Why Egypt Is Asking Its People To Eat Chicken Feet

Egypt’s economic situation is so dire that the government is asking people to eat chicken feet.

The Arab world’s most populous nation is suffering a record currency crisis and the worst inflation in five years, making food so expensive that many Egyptians can no longer afford chicken, a dietary staple.

Poultry prices rose from 30 Egyptian pounds (then around Ksh.235.7) per kilogram in 2021 to as much as 70 Egyptian pounds (around Ksh.292.8) as of Monday, according to state media.

The soaring cost has prompted the nation’s National Institution for Nutrition to call on people to switch to eating chicken feet.

“Are you looking for protein-rich food alternatives that will save your budget?” it asked in a Facebook post last month, listing a number of items starting with chicken feet and cattle hooves.

Many Egyptians are furious that the government would ask citizens to resort to foods that are symbols of extreme poverty in the country.

In Egypt, chicken feet are seen as the cheapest of meat items, considered by most as animal waste rather than food.

“(We have entered) the age of chicken feet, the collapse of the Egyptian pound… and drowning in debt,” tweeted Mohamed Al-Hashimi, a media personality, to his 400,000 followers.

But others seem to be heeding the call. After the recommendation to switch to chicken feet, the price of one kilogram of the product reportedly doubled to 20 Egyptian pounds (around Ksh.83).

Authorities say that close to 30% of Egypt’s population is below the poverty line. The World Bank in 2019 however estimated that “some 60% of Egypt’s population is either poor or vulnerable.”

Here’s what you need to know about Egypt’s spiraling economy:

How did Egypt get here?

Egypt has gone through a number of financial crises over the past decade, which forced it to seek bailouts from creditors like the International Monetary Fund (IMF) and Gulf Arab allies.

But the country has become trapped in a cycle of borrowing that analysts say has become unsustainable.

Its debt this year amounts to 85.6% of the size of its economy, according to the IMF.

Some of the factors contributing to Egypt’s failing economy include the military’s outsized role, which analysts say weakens the private sector, as well as the allocation of great sums to mega projects like Africa’s tallest tower and a new capital city in the desert which houses a defense ministry that authorities boast is bigger than the Pentagon.

Egypt’s economy took a significant blow in the past two years when the effects of the COVID-19 pandemic and the Ukraine war squeezed its foreign currency reserves and rising fuel prices pushed inflation up.

The pandemic saw investors pull $20 billion (approx. Ksh.2.5 trillion) from Egypt in 2020, and the economic fallout from the Ukraine war led to a similar amount leaving the country last year, according to Reuters.

“Twenty billion dollars is the equivalent of every penny Egypt has borrowed from the IMF since 2016, and it disappeared in weeks (last year),” said Timothy Kaldas, a non-resident policy fellow at the Tahrir Institute for Middle East Policy in Washington DC.

Those events contributed to the currency crisis Egypt faces today. The Egyptian pound lost almost half of its value over the past year, and last week briefly hit an exchange rate of 32 pounds to the US dollar, the lowest in its history.

In its latest bailout agreed in December, the IMF loaned $3 billion to Egypt, which it hopes will catalyze an additional $14 billion (around Ksh.1.7 trillion) in support from Egypt’s international and regional partners, including oil-rich Gulf nations.

What does the IMF need Egypt to do differently this time?

This year’s IMF loan was conditioned on Egypt implementing a number of structural reforms. And this time, the lender is taking on Egypt’s powerful military.

Along with introducing a flexible exchange rate – which would allow the value of the currency to be determined by the market instead of the central bank – the IMF also asked that Egypt reduce the role of the state, including the military, in the economy, and slow down national projects in order to limit pressures on the currency as well as inflation.

“What is exceptional about it is that it also encompasses Egypt’s military companies,” wrote Yezid Sayigh, a senior fellow at the Malcolm H. Kerr Carnegie Middle East Center in Beirut, Lebanon.

“This contradicts the initial impression given by the loan agreement announcement in October 2022, that the IMF had not used its leverage to place the military companies on the agenda.”

The IMF also demanded that all companies – including those owned by the military – publish an annual report “with details and estimates of tax exemptions and tax breaks.”

It remains to be seen whether these reports will ever be published. Kaldas says that many Egyptians want to know how wealthy the military is and also “the level of risk that Egypt’s military economic empire poses.”

“One of the challenges right now of understanding Egypt’s level of economic risk is we don’t know how much money military companies have borrowed,” he said.

Why is the military’s role in the economy so controversial?

The private sector in Egypt has been shrinking in the last seven years, according to Kaldas.

The S&P Global Egypt Purchasing Managers’ Index (PMI) for December, which measures the health of Egypt’s non-oil private sector, showed a “solid deterioration,” remaining below the 50-mark needed for healthy economic growth for 25 consecutive months.

Egypt’s military owns and operates a significant number of companies which private enterprises struggle to compete with.

From gas stations and pharmaceuticals to meat and dairy, military-owned companies make up a large proportion of Egypt’s economy.

But those firms don’t operate like private companies, enjoying special privileges without disclosing their financial data to the public.

The military also spearheads President Abdel Fattah el-Sisi’s vast national projects that critics say have sucked up much of Egypt’s funds.

Authorities have promised to list state-owned companies, including military-owned companies, on the stock exchange, a plan aimed at involving the private sector in their management.

The plan is yet to be fully implemented, and analysts are skeptical about it given the secrecy with which these companies normally operate.

Is Egypt likely to heed the IMF’s call?

Sayigh of the Carnegie Middle East Center says the delay in getting military-owned companies listed on the stock exchange and having their finances disclosed is evidence of the military’s pushback against the conditions.

Experts have questioned why international creditors had not leveraged their loans to drive Egypt’s military out of the economy.

The institution is a powerful one in Egypt, both financially and politically.

It was only with the military’s backing that Sisi was able to rise to power.

The former field marshal was at the forefront of a 2013 military coup that overthrew former President Mohamed Morsy, the country’s only democratically elected president.

Speaking to CNN’s Becky Anderson in Abu Dhabi on Monday, Egyptian Foreign Minister Sameh Shoukry said that state-owned enterprises “will be sold off to the private sector to encourage further investment” and that Egypt “is supported by the IMF in this regard.”

Asked how soon the government would review the military’s involvement in the economy, Shoukry said that Egypt is dealing with the challenges in a “holistic manner” while also “recognizing the social dimension” at the heart of the country’s financial woes.

Kaldas of the Tahrir Institute said that there are ways for the government to circumvent the IMF’s conditions by making changes that seem like compromises but don’t change the structure of the economy.

“If everything in this agreement is actually followed, it is almost certain that there would be a reduced role (for the military in Egypt),” he said.

Why should the rest of the world be concerned?

When Egypt devalued its currency in October, the US embassy in Cairo issued a “demonstration alert,” warning of potential unrest.

More than a decade ago, Egypt and other Middle Eastern states slipped into a wave of protests that toppled governments, stunted economies, and even triggered civil wars that drove millions of refugees to flee the region.

In 2011, when millions took to the streets demanding changes of regime, the most commonly chanted slogan in Egypt was “Bread, freedom and social equality.”

Egypt is home to more than 106 million people, more than half of whom are living in precarious economic conditions.

Many are unable to afford basic food staples, limiting their spending and even restricting diets, and analysts have warned of unrest should the situation deteriorate significantly.