Egypt’s Suez Canal authority signed development agreements worth $1.6 billion on Wednesday with Chinese and European companies. The deals come as the government is seeking to use its ports to boost the economy.
The General Authority for the Suez Canal Economic Zone signed an agreement to develop and manage the container terminal in the Sokhna Port in the Red Sea with the Hong Kong-based Hutchison Ports, the French shipping company CMA CGM, and the Chinese state-owned COSCO Shipping, Egypt’s state-owned news outlet Al-Ahram reported.
The authority signed a second agreement to develop the Dekheila Port near Alexandria on the Mediterranean with Hutchison Ports and the Switzerland-based Mediterranean Shipping Company. The purpose of both agreements is to establish a container axis between the Red and Mediterranean seas, said Transportation Minister Kamel El-Wazir, according to Al-Ahram.
Why it matters: The Egyptian government is seeking to develop its Red Sea and Mediterranean Sea ports in an effort to improve the domestic economy. In September of last year, President Abdel Fattah al-Sisi announced three new yacht ports would be established along the Suez Canal.
The Egyptian economy has been struggling with inflation over the past year. The government announced last week that annual headline inflation reached 32.9% in February, largely due to food price increases.
Egypt’s foreign currency reserves are also decreasing, as Moody’s noted when it downgraded Egypt’s credit rating in February. More business flowing into Egypt’s ports could help remedy the situation.
Know more: The Egyptian government also announced this week it would start offering for sale the state-owned National Petroleum Company and National Company for Natural Water in Siwa. The purpose of the sale is to “lure foreign investment,” according to Egypt’s State Information Service.