The business community has high hopes that Egypt's presidency of the African Union (AU) this year will boost trade and investments with African countries. Egypt has strong economic and commercial ties with Nile Basin countries, including Rwanda, the Democratic Republic of Congo, Uganda, Tanzania, Ethiopia and Burundi, making bilateral trade far exceed raw materials and simple commodities. According to the State Information Service (SIS) website, Egypt has invested $15 million in Rwanda in construction and mining. Egypt exports aromatic mixtures, juices, juice makers and botanical extracts, and imports copper and zinc. Egypt imports tea and tobacco from Kenya and Uganda. It exports sugar, sanitary paper, laundry products and polypropylene sheets to the former, and sugar, paraffin wax and laundry products to the latter. Egyptian companies are highly active in Uganda, including conglomerates such as Al-Nasr for Import and Export, EgyptAir, Banque du Caire, the Arab Contractors, Mantrac Egypt — owned by Mansour Group — and Qalaa Holdings that has 85 per cent usufruct of the Rift Valley Railways connecting Mombasa port and Kampala. Egypt exports aromatic mixtures, paraffin wax and copper wires to Ethiopia and imports camels and cows. Egyptian investments in Ethiopia are worth $2 billion, and in the past few years more than 150 Egyptian businessmen visited Ethiopia. The National Bank of Egypt opened an office in Addis Ababa to facilitate financial procedures for Egyptians investing in Ethiopia, the Arab Contractors also has a branch there, and the country has resumed importing meat from Ethiopia. Egypt imports copper from Tanzania, and exports sugar and sodium carbonates, while importing tea from Burundi and exporting aromatic mixtures and barley. Figures released by the Central Agency for Public Mobilisation and Statistics in December 2018 reveal that trade between Egypt and Nile Basin countries recorded a 17.5 per cent increase during the first 10 months of 2018, estimated at $1.38 billion, and up from $1.139 billion during the same period in 2017. Egyptian exports to Nile Basin countries increased by 8.9 per cent in the first 10 months of 2018, recording $876 million, up from $804 million during the same period in 2017. On the other hand, Egypt imported $504 million worth of commodities from Nile Basin countries during the first 10 months of 2018, with an increase of 50.4 per cent in the same period in 2017, which was estimated at $335 million. There are many trade treaties partnering Egypt with its sisters in the continent, such as Agadir, Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and East African Community (EAC). Given the long, strong relationship between Egypt and African countries, one would assume trade would be up to par. Not according to data released by Amr Nassar, the minister of trade and industry, who said his ministry was seeking to increase trade with African countries to two per cent of its overall trade, up from less than one per cent currently. A Ministry of Trade and Industry report in 2017 said African countries' ranking as suppliers for Egyptian imports was not impressive, with Sudan coming in 13th place and Libya 14th. In the list of fast growing export markets, South Africa came in second and Namibia seventh. The least developing countries included Central Africa in sixth place, Zambia eighth, Guinea 10th and Senegal in 11th. Chemical products are in demand in the African market. The Chemicals and Fertilisers Export Council (CFEC) announced this week that a delegation of Egyptian businessmen will fly to Uganda later this month to discuss trade and investment opportunities with the Egyptian business community in Uganda. Alaa Saqti, head of the Egyptian industrial zone in Ethiopia, said most African countries are not industrially strong, importing all their needs from abroad. It is better for Egyptian companies to establish industrial areas in partnership with importers in each country to manufacture what they usually import, Saqti said. Treading the trade line with African countries will not pay off because of the difficulty in establishing regular shipping lines. It's highly costly and risky, he added. At the closing session of the 2018 Africa Investment Forum (AIF), President Abdel-Fattah Al-Sisi announced the establishment of an investment risks guarantee fund to encourage Egyptian investors to set up investments in Africa, participate in the continent's development and take advantage of the available opportunities in the continent. The fund would enable African countries to negotiate with international institutions, support infrastructure projects and help speed up the finalisation of the Cairo-Cape Town highway to boost inter-African trade. A fund for investment in IT infrastructure will be established, according to the AIF's recommendations, in order to support technological development and digital transformation in the continent, and enhance cooperation between Egypt and African countries in governance and to fight corruption. Other recommendations adopted at the AIF included increased cooperation between the public and private sectors in implementing transportation projects, reflecting the vast potential and opportunities in the continent and the ability to utilise technological tools to create new job markets. The investment risks guarantee fund will cover non-trade risks, said Saqti, explaining that the fund will not approve exporting commodities that are not in demand. The fund will also protect exporters' money and conduct studies on what each country needs, he added. Khaled Abul-Makarem, head of the CFEC, told the council on Monday that coordination is afoot with the Africa Department of the Egyptian Commercial Service Office to decide on the most suitable form for Egypt's presence in the Horn of Africa region in general, and in Djibouti in particular, be it through establishing a logistics zone or a storage area in the free zone as well as on the possibility of developing this Egyptian presence to include the establishment of an industrial zone that encompasses a number of assembly production lines. The CFEC is more inclined to replace exhibitions in Africa with trade missions, Abul-Makarem said. He added that more focus should be drawn to markets in Senegal, Sudan, Tanzania, Angola, Nigeria, Kenya, Uganda and Ghana since they depend on imports from Egypt and Tunisia, with preferences pointing in the direction of Egypt. The council's plan for exhibitions, missions and trade events during the first half of the year, pointed out Abul-Makarem, includes an exhibition in Kenya from 19 to 22 March and another in Morocco, the Plast Expo, from 25 to 28 June, and three trade missions including — but not limited to — the Ivory Coast, Senegal, Nigeria and Ghana.He added that the CFEC finalised its work strategy in the African market during Egypt's AU presidency. The plan will be discussed at the council's next meeting to be presented at the Export Development Authority. The CFEC expects chemical exports to record a 40 per cent increase with the elimination of custom tariffs agreed in the Tripartite Free Trade Area (TFTA) accord between the SADC, COMESA and EAC once it goes into effect. Egypt-Africa trade is not proportionate to the size of the African market. Currently standing at $1.2 billion, trade between Egypt and African countries can reach up to $8 billion or $10 billion, said Sherif Al-Gabali, head of the African Cooperation Committee at the Federation of Egyptian Industries. The reason trade is not reaching its maximum potential, Al-Gabali told Al-Ahram Weekly, is primarily due to the insufficient presence of Egyptian companies in African markets. Such presence requires embarking on promotional missions, holding exhibitions in African countries and setting up logistics centres to effect a shake-up in trade and transportation of supplies, Al-Gabali added, pointing out that African countries are lacking in many commodities, prime among which are textile products. That is where Egypt has a golden opportunity to increase its exports. Mohamed Qassem, former deputy president of the Supreme Council for Textile Industries, said the textiles city project, developed in cooperation with the General Authority for Investment and Free Zones, may act as an exporting centre of textiles products to Africa, especially in the north and east of the continent. Ministry of Trade and Industry figures reveal that Egypt's participation in the COMESA helped increase trade between African countries, particularly two-way trade. COMESA member states also include Sudan, Eritrea, Ethiopia, Angola, Burundi, Rwanda, Comoros, Congo, Djibouti, Kenya, Madagascar, Malawi, Mauritius, Namibia, Uganda, Swaziland, Zambia, Libya, Seychelles and Zimbabwe. In 1998 Egypt's imports from COMESA countries stood at $154 million, and increased to $608 million in 2017, and exports increased from $46 million in 1998 to $1.6 billion in 2017. Nassar said Egypt has been pumping increasing investments in COMESA countries, and exports focus on building materials, such as steel and cement, in addition to chemical and paper products and medicines, while Egypt's imports from COMESA states are primarily coffee beans, tea, tobacco, oily fruits, sesame, livestock and copper. During the AU summit held in March 2018 in the Rwandan capital of Kigali, 44 countries, including Egypt, signed the African Continental Free Trade Area agreement. Egypt's trade relations with Africa go beyond those shared with Nile Basin and COMESA states. The country is looking at the implementation of the TFTA agreement between the COMESA, SADC and EAC. This agreement comprises 26 countries — half of the AU's member states — with a total GDP estimated at 60 per cent of the total GDP of the continent and 57 per cent of Africa's population. The TFTA Ministerial Committee announced at the Seventh AU Trade Ministers meeting, which Egypt hosted on 12-13 December 2018, that it expected TFTA to go into effect in April after a minimum of 13 countries — out of 22 — sign the agreement. COMESA Secretary-General Chileshe Kapwepwe said at the summit that 61 per cent of the TFTA regulations have been agreed upon. Nassar, the minister of trade and industry, said Egypt's parliament will soon approve the TFTA, adding that the implementation of the African Continental Free Trade Area agreement is a crucial step for the desired economic integration between African states and the establishment of a unified African market based on free trade and absent customs and technical obstacles. Developing the infrastructure of transportation, IT and monetary services will boost trade between the countries of Africa and double two-way trade to reach 22 per cent of the total African trade in 2022, the minister added. Meanwhile, the General Authority for Investment and Free Zones signed two memoranda of understanding with Ethiopia and Uganda to increase cooperation in investment. Other agreements signed include four water desalination stations, the Mangoky River bridge project with Madagascar, the development project of the Gulf of Kokodi with Ivory Coast and the expansion project of the potable water system in the area of Mangochi with Malawi. Many Egyptian companies are actively in business in African states, such as the Arab Contractors, engaged in projects in 18 countries at a value of $1.5 billion. One of the company's latest projects was signed in December in the attendance of the prime minister. The Arab Contractors, in partnership with Al-Sewedi Electric, won the bid to build the Stiegler's Gorge dam in Tanzania to generate hydroelectric power from Rufiji River. The Arab Contractors is currently engaged in projects in four African countries at an estimated cost of $400 million-$450 million, as part of its plan to increase its presence in African markets and build mega-projects. In 2018, the company executed a mega-project that entailed building a huge water network in Mauritania, 540km from the capital, and was contracted the project of expanding Abidjan Airport in the Ivory Coast. The company also built a 114km road in Congo with a budget of $100 million. For the Arab Contractors, road networks constitute 75 per cent of the company's businesses in African markets, besides service projects such as hospitals. Another Egyptian company, Qalaa Holdings, has invested $650 million in a number of projects in Africa, according to its president Ahmed Heikal. The group seeks to spend LE30 billion in investments in African states from 2018 to 2020.
