Government of National Accord fears ‘bread revolt’ in Libya over price hike

Agreement reached to cancel the price increase as anger mounted among the disgruntled population.
Saturday 16/01/2021
A file picture shows a Libyan man receiving bread after a long wait in a queue, in Benghazi. (AFP)
A file picture shows a Libyan man receiving bread after a long wait in a queue, in Benghazi. (AFP)

TUNIS – The food control centre of the Libyan Government of National Accord (GNA) announced an agreement to bring the price of bread back to its previous level. The decision was taken to avoid what observers described as a “bread revolt” that risks erupting throughout  the country at any moment, as a result of the widespread anger among Libyans about the sudden rise in the price of bread.

The head of bakers’ union, Saeed Boukhreiss, accused public and private milling companies of raising the price of flour to its highest level, ie, to 220 dinars. He said that those companies raised the price of ingredients used in making bread, such as yeast, oil, salt and sugar.

The food control centre said that it decided to reinstate the previous price of bread, during a meeting with the general director of the flour milling and feed company, the director of the Tripoli municipal guard and members of the bakers’ union.

Members of the food control centre stressed the need for all bakeries to adhere to set standards and sanitary specifications, and not to use prohibited foodstuffs in the manufacture of bread.

The ministry of finance of the GNA said in a statement that Minister Faraj Boumtari examined with the head of the bakers’ union the situation of bakeries after the rise in flour prices leading to the increase in the price of bread. The meeting was devoted to the discussion of the production process in bakeries and the availability of flour and wheat at mills and bakeries and the possibility of expediting the supply of sufficient stocks.

The statement indicated that the two sides stressed the importance for bakeries to adhere to the controls for manufacturing bread and the prices that are set by the ministry and the supervision of bakeries by the control authorities. The union chief said there is continued communication with the bakeries and that there was commitment to adhere to these controls.

But analysts emphasized that rise in the price of bread is one of the negative repercussions of the rise in the exchange rate of the dollar against the Libyan dinar by 230 %, after the decision to unify the exchange rates took effect in January.

The head of the bakers’ union explained that the mills raised the price of flour to 210 dinars per quintal, the equivalent to approximately $ 47, after it used to be 155 dinars, or about $ 35 per quintal, indicating that “the prices for all bread industry components have increased, especially oil, Salt and yeast.”

On January 3, the Central Bank of Libya began applying a new rate of 4.48 Libyan dinars to the US dollar, after an agreement on this was reached between authorities in the west and east of the country last December, so that the rate nears its value on the black market, where the rate of the official dollar before this move was about 1.4 dinars.

Local activists pointed out that three loaves of bread are being sold now for a dinar, as the price of bread rose from a quarter of a dinar to 33 dirhams, as the Tripoli municipality warned, on Thursday, that legal measures will be taken against speculators making a profit on the price of bread.

Activists added that the high price of bread may provoke popular unrest across the country. They stressed that the population lacks most of the basic services, and he has nothing left but a loaf of bread, which is now in jeopardy as a result of the failed policies of the Government of National Accord.

In the east of the country, the news agency affiliated with the interim Libyan government said, “The news of the bread price hike by some bakeries in Benghazi, have sparked anger and resentment among citizens who have been suffering for a long time from cash shortages and delayed payment of salaries, against rising exchange rates for the dollar, hence putting people in a dire situation. ”

The agency quoted the Official Spokesman for the Municipal Guard, Captain Ibrahim Al-Talhi as saying that the agency had received several complaints from citizens regarding the high price of bread.

He emphasized that the role of the municipal guard is to ensure oversight, not to legislate, meaning that it is not within its competence to set or change any prices. Its only role is to monitor the attitude of concerned authorities and the extent of their commitment to maintaining prices.

Economics professor at Benghazi University, Attia Al-Mahdi Al-Fitouri, said the price of a loaf of bread has been on the rise for some time, and the government is unable to monitor and impose a specific price on bakeries.

He indicated that the size of a loaf of bread often changes, and has no specific size or weight. Fitouri also accused the Central Bank of Libya in Tripoli of contributing indirectly to price hikes.

He emphasized that “the stability of the economy is more important than the decrease in reserves; because reserves are intended to stabilise the economy, in addition to the fact that Libya has reserves that can last for more than five years, even if the oil pumps are shut..

Libya consumes 1.3 million tonnes of wheat annually to cover the needs of the local market, of which 75 % are imported after the decline in domestic production of wheat to 250,000 tonnes.

There are 4,160 bakeries in various parts of Libya, in addition to 57 flour mills.

Parties close to the GNA tried to justify the position by the rise in the price of wheat on world markets.

Tripoli parallel parliament and Chamber of Commerce and Industry member Muhammad Al-Ra’id said, “The high price of flour in Libya is caused by a 20 percent increase in the price of flour on the global market, and has nothing to do with the adjustment of the exchange rate.”

He pointed out that the price of flour will increase by 18 percent, and that the Central Bank of Libya has not opened credits to wheat imports since last August.