File Photo: Cargo ships passing through the Suez cannel. Photo courtesy of SCA Facebook page.
This target is close to the canal’s record-breaking revenue of $9.4 billion in FY2022/23 before the Israeli war in Gaza, which started on October 7 and triggered the ongoing Houthi assaults.
In March, Prime Minister Mostafa Madbouly said the annual revenue of the Suez Canal had declined by more than 50 percent.
Despite efforts by a United States-led naval coalition to counter the attacks, the Houthis have continued to target ships in the Red Sea especially those linked to Israel, the US, and the UK.
The latest Houthi attacks were only a few days ago when they struck ships perceived to be linked to Israel: two in the Gulf of Aden and one in the Indian Ocean.
The tensions in the Red Sea have led several shipping companies to divert their ships from the Suez Canal, where 12 percent of global trade used to cross, to the much-longer Cape of Good Hope.
Chairman of the Suez Canal Authority (SCA) Osama Rabie said Red Sea disturbances diverted 3,395 ships, according to a statement circulated by media on Monday.
During a meeting of the House of Representatives’ Planning and Budget Committee, Rabie noted that this alternative route involves piracy and extends the journey by more than 10 days.
He emphasized that the fact that there is no ideal alternative to the Suez Canal has been demonstrated to the whole world.
The total project budget of the SCA for FY 2024/2025 amounts to about EGP 567.83 billion (around $12 billion), Rabie said.
The revenue expectations in US dollars amount to around 9 billion dollars, he added.
Expenditures for the authority in the new budget reach EGP 204.9 billion (around $4.4 billion), with a net profit of EGP 214.5 billion (around $4.6 billion) and capital revenues of EGP 147.628 billion (around $3.1 billion).
Suez Canal revenues are a key source of foreign currency for the country alongside tourism and remittances.
The country has been grappling with a foreign currency shortage over the past two years, which has been softened recently by huge influx of foreign investments.
The foreign currency reserves of the country have been cemented after a mega $35 billion deal with the UAE to develop Ras El-Hekma area in February as well as funding from international partners, including the World Bank and the IMF.
Different expectations
An assessment report by the United Nations Development Program (UNDP) expects a decline in the combined revenues from the Suez Canal and tourism in Egypt in the coming fiscal year in light of repercussions from the Gaza war.
The report estimates a $9.9 billion decline in FY 2023/24 and 2024/25 in a medium-intensity scenario, and a $13.7 billion drop if the war intensifies and other regional actors are involved.
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