How can Egypt benefit economically from African Union presidency?



Mon, 11 Feb 2019 - 09:50 GMT


Mon, 11 Feb 2019 - 09:50 GMT

FILE – African Union

FILE – African Union

CAIRO – 11 February 2019: Egypt officially received the presidency of the African Union (AU) at the inauguration of the 32nd summit of the AU, taking place from February 10 to 11 in Addis Ababa, Ethiopia.

The summit is held under the theme “The year of refugees, returnees, and international displaced persons - towards durable solutions to forced displacement in Africa.”

Egypt has focused on its relationship with the African countries, holding several conferences to pave the way to better African relationships, including Africa 2018, Food Africa 2018 and first African Intra-Trade Fair. Now, a question pops up about how can Egypt benefit from its presidency of the AU?

Officials and experts told Egypt Today that Egypt’s presidency of the AU can benefit its economy as the federation contains 55 country members where the state can market its investment opportunities as well as its products and goods.

In the same context, Chairman of the African Trade Commission Mohamed Kassem said that Egypt's presidency of the African Union could be economically exploited optimally, especially since the federation includes 55 countries.

“Egypt has good economic relations, although it has decreased somewhat over the past years. The union will restore Egypt's political and economic role in Africa,” Kassem noted.

He added to Egypt Today that Egypt is associated with Africa with joint trade agreements and can benefit from the process of integration in the free trade area of the continent in addition to the other agreements, pointing out that there is a golden opportunity in the Egyptian presence in a number of larger countries.

It also provides access of goods manufactured in Egypt to all African countries during the next phase, according to Kassem.

The chairman of the Committee on Trade with Africa stressed that the raw materials needed by the local industry could be imported from the African continent, but to increase Egypt's exports, it cannot be based solely on trade agreements. We need to develop our products, so that we can actually benefit and increase exports in the next stage.

Economics professor Ahmed Abdel-Hafez stressed that following the events of January 25, Egypt's economic role has declined and the role of the Chinese and Indian companies has become greater. However, the current period is witnessing the return of Egyptian economic influence in Africa.

“The launching of major projects by Egyptian hands in some African countries and the joint investments between Egypt and African countries will increase during Egypt's presidency of the African Union,” Abdel Hafez referred.

He added that the figures announced for trade with Africa are very weak and do not reflect the historical relations with the continent's countries, especially since Egypt can export dozens of products to African countries. He also highlighted the possibility of exploiting the raw resources in African countries, clarifying that the African countries have the necessary wood for Egyptian furniture, as well as raw materials for other industries.

“The volume of trade with African countries hit $3.4 billion in 2017 and $4.2 billion in 2018,” Minister of Trade Amr Nassar previously stated.

Meanwhile, Member of the Export Council of Agricultural Crops Khalid Shaker emphasized the importance of addressing the need to exploit trade agreements with Africa.

“There are agreements to facilitate the trade movement such as the COMESA agreement; these make the African market open to Egyptian products, which are distinguished and have competitive prices compared to prices of Indian and Chinese products, as well as products that enter without customs through trade agreements.

Egypt should expand in the coming period in establishing joint exhibitions and promotional missions,” Shaker said.

COMESA is a free trade area that was founded in 1994 and its headquarters is in the Zambian capital Lusaka. COMESA comprises Kenya, Sudan, Mauritius, Zambia, Zimbabwe, Djibouti, Malawi, Madagascar, Rwanda, Burundi, Comoros, Libya, Uganda, Seychelles, Congo, Eritrea, Ethiopia, Swaziland, Somalia, and Tunisia.

Member of the General Division of Exporters of the Federation of Chambers of Commerce Hossam Alwan stressed on the need to set an urgent plan to increase Egyptian exports to the African market to increase trade cooperation during Egypt's presidency of the union.

He pointed to the importance of developing sectorial strategies for most-demanded products in the African market by the Export Development Authority.

The Export Development Authority prepared a plan to increase exports to the African market, which included the needs and requirements of the African market of non-petroleum products, which recorded $334 billion, according to the statistics of 2015. The plan included launching trade missions and participating in missions and 35 external exhibitions in 2019.

Moreover, Head of the Insulating Materials Division of the Federation of Industries, Kamal el-Desouki, affirmed that it is necessary to establish logistics centers in Africa so that we can provide them with the present commodities and return strongly to this market. He pointed out that the activation of the free trade agreement with African economic blocs will support the trend of increasing Egyptian exports to the continent as well as increasing the volume of joint investments.

In 2018, President Abdel Fatah al-Sisi announced that Egypt will establish an investment risks guarantee fund to encourage Egyptian investors to start investments in Africa and take advantage of the huge opportunities in the continent.

Also, Prime Minister Mostafa Madbouli said that Egypt aims to double the volume of intra-trade with the African countries in five years to reach $10 billion, from the current $5 billion.

“Egypt is the gateway to Africa and the meeting point of the civilizations of the ancient and modern world,” Minister of Investment Sahar Nasr said earlier.

On March 21, 2018, Egypt joined 43 other African countries in signing the African Continental Free trade Area (CFTA) agreement in Kigali.

The agreement aims to ease the trade exchange between the countries that signed it according to a scheduled timeline and not through an immediate activation of the agreement. In addition, it will remove barriers and tariffs among the African countries, bringing together 1.2 billion people with a combined gross domestic product (GDP) of more than $2 trillion.

CFTA is considered the biggest deal ever signed since the World Trade Organization (WTO) was established as it was signed by 43 countries.

Additional Reporting Eslam Said



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