Egypt plans new maritime line to East Africa for increasing exports

Egypt has announced that it plans to launch a regular maritime line from the port of Ain Sokhna, east of Cairo, to East African countries in October with the aim of ensuring the arrival of Egyptian goods as well as boosting exports to East African countries and landlocked countries, including Ethiopia, South Sudan, Uganda, Rwanda and Burundi.

In a press statement May 19, Public Enterprise Sector Minister Hesham Tawfik said the new maritime line will help boost trade to Africa, transport goods and provide logistical services to exporters and importers, with the aim of promoting trade between Egyptian and African countries and reaching new markets to support the national economy.

The minister also said the new maritime line will help Egypt enhance its role as a northern gateway to African trade with European countries. He added that the line will provide elements of logistical support from transport, warehousing and insurance services.

Construction for the line started this month; the line is to start in October. The government did not announce the cost of the project and said it will be paid for by the Holding Company for Maritime and Land Transport.

Meanwhile, the Ministry of Transport announced May 19 that a committee was set up to study the available transport capacities and the development of maritime transport services, in light of the government directives in this regard, in cooperation with the relevant ministries.

Economists and transport experts have praised the establishment of the new shipping line, arguing that it will give a push to Egypt’s exports and trade with both African and European countries.

Bassant Fahmi, an economist and a member of the Economic Affairs Committee at the Egyptian parliament, said launching a maritime line between Egypt and East African countries is a long-awaited decision.

“Maritime transport is the easiest, safest and cheapest means of transport and with taking this decision, trade with Africa will see an unprecedented progress,” Fahmi told Al-Monitor.

Fahmi said the maritime line would facilitate trade between Egypt and Africa as well as boost Egypt’s position as an export hub where logistical services can be provided. “The new maritime route will also help the transfer of goods from Africa to Europe and vice versa through Egypt,” she added.

Tawfik said in his May 19 statement that the government is also planning to revive the Ro-Ro line between Egypt and Turkey, which halted in 2014 due to political tension between the two countries.

The Ro-Ro is an agreement signed by Egypt and Turkey in March 2012 to facilitate the transfer of exports between the two countries. The deal is aimed to use Egyptian ports to transport Turkish exports of food, electrical appliances and textiles to Gulf countries after Syrian authorities closed the crossings to Turkish trade. With tensions between Egypt and Turkey soaring following the ouster of President Mohammed Morsi in 2013, Egypt decided not to renew the Ro-Ro agreement in 2014.

Ahmed el-Shami, an economist and a professor of feasibility studies at Ain Shams University, said economic relations between Egypt and Turkey have in recent years been enhanced despite the political conflict between the two countries.

“Egypt is now differentiating between the political clash and economic relations with Turkey and this has been reflected in the growth of trade between the two countries in the last few years,” Shami told Al-Monitor.

Shami also said that with Egypt opening up to African and European countries in terms of navigation, economic and political gains will be created and the country's trade competitiveness will be boosted.

According to data released by the Egyptian Ministry of Trade and Industry, Egyptian exports to Turkey reached nearly $2 billion in 2017, up by 38.5% from $1.4 billion a year earlier.

Shami also said that the new maritime line with Africa comes as part of the government’s focus on increasing trade with African countries and reinvigorating relations with the African continent.

At the conclusion of the African Summit in Addis Ababa in February, Egyptian President Abdel Fattah al-Sisi said that pushing forward integration and effectuating free trade with Africa are among Egypt’s top priorities in 2019.

According to the Central Agency for Public Mobilization and Statistics, trade volume between Egypt and the African continent reached $6.2 billion during the period from January until November 2018, up by 26% compared with the same period of 2017.

The same data showed that Egyptian exports to African countries stood at $4.2 billion during the period from January until November last year. Egyptian imports from African countries, meanwhile, stood at nearly $2 billion in the same period.

Egyptian exports to African countries account for between 5% and 8% per annum of Egypt's total exports, according to data from the statistics agency.

Egypt's imports from the African continent account for between 1.5% and 4% of Egypt's total imports, the same data showed.