Egypt and Ethiopia are discussing forming a joint industrial zone in Addis Ababa, Egypt’s Minister of Foreign Trade and Investment Mounir Fakhry Abdel-Nour said in a Sunday presser in Addis Ababa.

The industrial zone, according to Abdel-Nour, will be formed by the private sector accompanied and supported by the government, MENA reported.

The Egyptian foreign minister arrived in Ethiopia Sunday with a number of cabinet’s ministers on a two-day visit for the fifth session of the joint Egyptian-Ethiopian committee to strengthen ties between the two countries.

The two countries have been embroiled since last year in disagreement over the construction of the Grand Renaissance Dam in Ethiopia, but have recently started a process to resolve points of contention between them.

Egypt is worried the dam would have a negative effect on its share of Nile waters, while Ethiopia dismissed these fears.

The participation of a number of Egyptian ministers in the joint session, according to Abdel-Nour, is considered an important message for everyone and a strong incentive for Egypt’s private sector to turn their sights on the promising Ethiopian market which is full of opportunities in many sectors.

Egypt’s private sector is already investing in Ethiopia. According to Abdel-Nour, there are over 38 projects by Egyptian investors in Ethiopia, including in some vital sectors as electricity with the Ethiopian irrigation ministry.

On the political aspect, Abdel-Nour said Ethiopia is important to Egypt for two reasons. First, Ethiopia is the largest source of Nile water and second, both Egypt and Ethiopia share in the security of the Horn of Africa, a major concern for Egypt since it’s the entrance to the Red Sea.

From a historical perspective, Abdel-Nour said Egyptian pharaohs exchanged goods with the Land of Punt, pointing also to religious ties between the Orthodox Church and Al-Azhar, the highest Sunni authority in Islam.

Abdel-Nour also pointed out that Ethiopia can be an important market for Egyptian products, especially that Egypt is currently directing its sights towards Africa. He said the current trade exchange between the two countries is limited to only $217 million annually, describing the exchange as “modest, and doesn’t reflect the two countries’ hopes and ambitions.”

"Efforts should be exerted to increase the trade exchange to half a billion dollars within the next three years."

He pointed that Ethiopia exports coffee, meat, leather and grain; all products that Egypt imports while Egypt can export to Ethiopia fertilisers, medicines, engineering goods and electrical appliances.

Abdel-Nour concluded that Ethiopia is poised to ratify the Common Market for Eastern and Southern Africa (COMESA) next year, which will lower tariffs on a number of products.