Egypt close to achieving highest exports in its history, exporters explain reasons: CNN



Thu, 30 Dec 2021 - 05:48 GMT


Thu, 30 Dec 2021 - 05:48 GMT

Exports- Creative Commons via Pixabay

Exports- Creative Commons via Pixabay

CAIRO - 30 December 2021: Egypt’s exports are expected to exceed $31 billion during 2021, after recording $29.087 billion during the first 11 months of the year with an annual increase of 27 percent, or $6.2 billion, according to the Ministry of Trade and Industry.


Sources attributed to CNN, the American news network, the increase in Egyptian exports to the dependence of a large number of markets on Egyptian products to replace the countries whose factories stopped as a result of the emerging coronavirus pandemic, in addition to the steps to stimulate the Egyptian government to export, most notably the Export Burdens Restitution Program.


By recording $31 billion commodity exports during 2021, this will mark the highest value ever in the history of Egyptian merchandise exports, exceeding the highest number achieved in 2019 which amounted to $25.6 billion in 2019, according to CNN.


The Ministry of Trade and Industry believes that this increase in the exports prove the ability of the export sectors to deal with the global crisis imposed by the outbreak of the new Coronavirus since the beginning of last year, despite the challenges witnessed by the global economy, which in turn affect the Egyptian economy, including high inflation rates and freight prices.


Khaled Abu El-Makarem, head of the Export Council for Chemical Industries, attributed the growth in the volume of Egyptian commodity exports during 2021 as a result of the dependence of a large number of markets on Egyptian products to replace the countries that stopped their factories as a result of the emerging Coronavirus pandemic, including factories in China and a number of European countries that stopped during the pandemic. This gave the Egyptian factories the opportunity to replace them, especially in nearby markets.


 The volume of Egyptian chemical industry exports increased by 40% during 2021 to exceed $6 billion, and entered new markets for the first time, according to Abu El-Makarem.


Egypt’s exports of chemical and fertilizer industries rose to $5.4 billion in the first 10 months of 2021, with a growth rate of 42%. The sector’s exports accounted for 20% of Egypt’s total merchandise exports, and the European Union accounted for the largest share with 29% of the total Chemical exports, followed by Asian and Arab countries with 21% each, according to an official statement by the Export Council for Chemical Industries and Fertilizers.


Abu el-Makarem attributed the reason for the growth of chemical exports to benefiting from the free trade agreements signed between Egypt, whether with African countries - which achieved high growth rates in importing Egyptian products - or the Mercosur countries, and Egypt exported to the latter huge quantities of fertilizers. 


During November, Egypt assumed the presidency of the Common Market for Eastern and Southern Africa (COMESA) for the second time, after 20 years had passed since the last time that Egypt assumed the presidency of the grouping in 2001, and Egypt launched the medium-term strategic action plan for the period 2021-2025 for "COMESA", which aims to: deepening economic integration, regional integration and development among the grouping countries, in harmony with the African Continental Free Trade Area Agreement.


In 2010, Egypt also signed a preferential free trade agreement with the Southern Common Market (Mercosur), which allows preferential privileges for Egyptian exports to enter the markets of Brazil, Argentina, Uruguay and Paraguay. Since the agreement entered into force on the first of September 2017, Egyptian exports to the countries of the assembly have achieved a remarkable increase, amounting to $396 million last year, with an 115% increase compared to 2017. Most of the Egyptian exports were concentrated in chemical materials such as nitrogen fertilizers, phosphate fertilizers, and vinyl chloride polymers, according to official data.


Abu Al-Makarem stated that one of the reasons for the increase in Egyptian exports this year is the disbursement of export support and the payment of overdue dues to exporters, which have accumulated over the past years to exceed more than LE 23 billion ($1.5 billion), which negatively affected the exporting companies and led to the reluctance of some to export in light of Its inability to pay its obligations, but with the adoption of an initiative to pay the exporters' arrears dues, the matter changed and encouraged most manufacturers and exporters to search for new export markets.


According to the data of the Ministry of Trade and Industry, the total export support disbursed during 2021 amounted to about LE 6.9 billion ($439.2 million), from which 1,355 companies benefited, while the total return of the delayed export burdens with the Export Development Fund, which disbursed about 30 LE billion ($1.9 billion) for more than 2500 companies.


Khaled Abu Al-Makarem expected the continued growth of Egyptian exports in the coming years, depending on the neighboring countries of reconstruction, such as the markets of Iraq, Syria and Libya, pointing out in this context to a meeting he had with the Libyan Minister of Industry in Egypt last week, which dealt with the participation of Egyptian workers in the reconstruction of Libya again. He sought the assistance of Egyptian products such as building materials and consumer goods. He also expected the continued growth of exports to African countries, especially those whose economies are improving based on the discovery of mineral and oil wealth.


Marie-Louis Bishara, head of the Export Council for the Ready-made Garments Industry, agreed with Abu el-Makarem about the reason for the growth of Egyptian exports to the dependence of a number of markets, especially the European Union countries, on Egyptian products to replace factories that stopped in some countries, the most important of which is China. Egyptian investors took advantage of this matter and made a huge effort to pump new investments to increase production and reduce costs to increase the competitiveness of Egyptian products, noting that the increase in Egypt's exports of ready-made garments reached 40% this year, reaching $1.78 billion.


Bishara added, in statements to CNN, that the most prominent importing country for Egyptian products is the United States of America - which accounts for 40% of the Egyptian market, followed by European countries by 30%, while the remaining percentage is distributed to Arab and other markets. It is expected that Egyptian exports of clothing and all products in general will continue to grow in the coming years as a result of the government's efforts to encourage exports.


President Abdel-Fattah El-Sisi directed that the volume of Egyptian exports reach $100 billion, and in order to achieve this, he decided to reform the Supreme Council for Export under his leadership, in light of the importance of the export file as it represents one of the main sources of the national economy and a key element in bringing in hard currency and then increasing the cash reserve of foreign currencies.


For his part, Sherif El-Sayyad, head of the Export Council for Engineering Industries, said that Egypt has become an alternative to China in some countries as a result of the high cost of raw materials and shipping in China, which affected its competitiveness. To increase production capacities to meet global demand, he pointed out that home appliances, electronic industries and cables accounted for large proportions of engineering industry exports this year.


According to official data, Egypt's total exports of engineering industries amounted to $2.6 billion during the first 10 months of this year, with a growth rate of 45%, and October alone achieved the highest monthly export volume since 2009, with a value of $351.5 million.


As for the most important importing markets for Egyptian products, El-Sayyad said, in statements to CNN, that the countries of southern Europe, North Africa and the Gulf are the most in demand for Egyptian products, in light of the proximity of the distance and the presence of direct shipping lines with them, expecting the continued growth of Egyptian exports at the same rates provided that China does not reduce the prices of its products, and the continuation of government support for export.




Leave a Comment

Be Social