Egyptian exports are not expected to grow this year, held back by instability problems, reports Ahmed Kotb Egyptian Minister of Industry and Foreign Trade Hatem Saleh announced last week that the export plan for the year 2012, which was targeting a total value of LE160 billion, will drop by LE30 billion due to instabilities that led to many contracts being cancelled. The volume of non-oil exports in the first half of 2012 (January to June) decreased by five per cent in comparison to the same period in 2011, he added. This means that export volumes will approximately be the same as 2011, which witnessed a total volume of LE131 billion, and that the growth rate of 20 per cent witnessed in 2011 will not be achievable this year. In 2010, total exports volume was estimated at LE110 billion, 19 per cent more than of 2009. The most affected export sector was the chemical sector, which represents 25 per cent of total Egyptian exports. "Exports of the chemical industries have plunged by 11 per cent since January 2012 until last month, achieving a total of LE17 billion," says Walid Helal, head of the Egyptian Chemical Industries Export Council. He added that last month alone witnessed a 26 per cent drop, compared to July 2011. "It's the first time ever to see such a decrease in one month." According to Helal, the plan was to export LE35 billion worth of chemical industries' products by the end of 2012 -- LE6 billion more than last year -- but that now is unlikely to happen. "After the 25 January Revolution, several cabinets were formed but all of them failed to realise the importance of supporting exports, that are among the main pillars of national revenues," Helal said, adding that former ministers of industry and trade failed to resolve problems exporters have faced since the revolution, especially strikes and sit-ins at Egypt's harbours that left many shipments stranded beyond their due date. "Exporters lost some of their markets as a result. Some of these markets can never be restored." Helal also stated that the industrial modernisation programme has been halted lately and the Export Support Fund (ESF) is sometimes out of cash. "All these problems discourage exporters to grow or sustain their businesses," he said. Although many export sectors were negatively affected this year and experienced drops in their total export volume, food industries are flourishing. "We have a seven per cent increase in total export volume during the first half of 2012," said Alaa El-Bahy, head of the Egyptian Food Industries Export Council. El-Bahy explained the surge, saying that several new investments have been pumped into the industry since 2010. He added that obstacles since the revolution have prevented a further growth. In June, the government approved LE3.1 billion for the ESF this fiscal year, up from LE2.5 billion in the previous fiscal year. In 2010, LE4 billion were allocated to the ESF. It may be that the government is heeding exporters' complaints. Minister Saleh said during a recent meeting with the heads of export councils that the government will give priority to exports and will work on solving any problems that stand against Egyptian exports reaching new markets. "Despite the difficulties that the Egyptian economy has been suffering since last year, Egypt could benefit from the revolution to reach new markets and double the export of non-oil Egyptian products," Saleh said, referring to Poland and Indonesia who succeeded in increasing their export volumes after political upheaval from $15 billion to $193 billion, and $50 billion to $200 billion respectively. Helal said that export councils are preparing long-term plans that would ensure fast growth of Egyptian exports. There are some steps that can be taken currently to remove some of the main obstacles that face Egyptian exporters, he noted. "These would include that the government ensure there won't be any more strikes or sit-ins in the harbours, supporting trade missions, and establishing logistics centres for Egyptian industries in different countries," Helal said. A recent study by the cabinet's Central Agency for Public Mobilisation and Statistics showed that the plan for increasing total exports volume from LE100 billion in 2010 to LE200 billion in 2013 is progressing well, especially that goods worth LE110 billion were exported in 2010 while the target was LE100.7 billion. In 2011, LE131 billion was achieved in exports while the target had been LE121 billion. Egypt's main non-oil exports include clothes, cotton textiles, citrus fruits and chemical products. The main export destination for Egyptian products is the European Union, at more than 30 per cent. Non-oil export revenues totalled $22 billion (around LE132 billion) last year, more than tourism ($8 billion) and Suez Canal ($5.2 billion) revenues.
