Tapping mutual benefits with Germany

Reem Leila , Ghada Raafat , Wednesday 31 Oct 2018

Reem Leila and Ghada Raafat report on President Abdel-Fattah Al-Sisi’s visit to Germany

Abdel Fattah El-Sisi, Angela Merkel
Egyptian President Abdel Fattah El-Sisi and German Chancellor Angela Merkel attend a news conference at the Chancellery in Berlin, Germany, October 30, 2018 Reuters

President Abdel-Fattah Al-Sisi arrived in Germany on 28 October for a four-day visit in which he participated in the mini-summit of African leaders as part of the G20 Africa Partnership initiative.

During the visit Al-Sisi met with Chancellor Angela Merkel to probe ways of boosting cooperation over counter-terrorism and halting illegal immigration.

“The visit comes within the framework of efforts by Egypt to promote cooperation with other African countries and G20 states in light of Egypt’s presidency of the African Union [AU] in 2019,” said Presidential Spokesman Bassam Radi.

Germany launched the G20 Africa Partnership during its presidency of the G20, a grouping of the world’s largest economies.

The initiative gives African states the opportunity to meet with potential investors with the aim of supporting growth, increasing productivity and creating new job opportunities.

The African members of the initiative are: Egypt, Côte d’Ivoire, Benin, Ethiopia, Ghana, Guinea, Morocco, Tunisia, Rwanda, Senegal and Togo.

The timing of the visit, two months before Egypt’s chairmanship of the African Union and Germany’s non-permanent membership in the United Nations Security Council, is important, says Hassan Abu Taleb, a political analyst at Al-Ahram Centre for Political and Strategic Studies.

“It allows for an exchange of views and coordination of stances over regional and international issues, focusing mainly on development in Africa.”

Egypt has had strong diplomatic relations with Germany for more than 150 years, points out Ambassador Gamal Bayoumi. “Germany has been supportive of Egypt and understands our important regional role.”

Egypt and Germany see eye-to-eye on a number of regional conflicts, including the Israeli-Palestinian conflict.

Germany banned the import of products labelled as being Israeli but which are actually from the occupied territories and according to Bayoumi, “the younger generation of Germans does not accept what they consider to be the unfair treatment of Palestinians by Israelis.”

Abu Taleb believes Germany’s growing relations with Egypt are a result of several factors, not least Egypt’s success in combating illegal immigration across the Mediterranean.

“Egypt has intensified maritime inspections and monitoring. It has presented a developmental alternative to youth to help end illegal migration, establishing fisheries and national mega projects that have created jobs.”

There are also 1,048 German companies operating in the Egyptian market. Trade between the two countries reached €5.8 billion in 2017, up from €5.3 billion euros in the previous year, and investment reached €700 million, up €200 over the same period.

Egyptian investments in Germany are valued at $46.1 million, concentrated in the pharmaceutical, furniture, medical equipment and tourist sectors.

German exports to Egypt account for 70 per cent of bilateral trade, says Mahmoud Mohamed Ahmed, vice president of the Arab-African Economic Council and a member of the German Chamber of Commerce, and the bulk comprises machinery, construction equipment, electro mechanics, hospital equipment, vehicles, auto parts and accessories.

Since 2015 Germany has also exported arms and security equipment.

Egyptian exports to Germany include jewellery, building materials such as cement and ceramics and agricultural produce.

German businesses have also contracted to build a number of factories in the Suez Canal industrial zone, including two producing cars for the European and African markets.

Cooperation is also taking place in the energy sector. Siemens and its local partners are constructing three natural power gas-fired power plants worth more than €6 billion, in Beni Sweif, Borollos, and the New Administrative Capital.

The plants will produce 14,400 megawatts, boosting Egypt’s power generation capacity by 40 per cent.

Egypt’s presidency of the African Union in 2019 also offers opportunities to Germany, as does Egypt’s membership of transcontinental trading blocks.

Egypt is well positioned to become Germany’s gateway to African markets. German factories in Egypt will be exempted from customs under the COMESA agreement. The factories will also allow German manufacturers access to low-cost Egyptian labour.

Germany itself suffers a shortage of labour, particularly in the engineering, electronics, computer, nursing and technical sectors, and would be an attractive destination for Egyptian workers.

GIZ, the German aid agency, also invests heavily in Egypt, overseeing development projects worth €400 million.

During his visit Al-Sisi met with German Minister for Economic Cooperation and Development Gerd Müller and stressed Cairo’s keenness to step up cooperation in the education sector.

“This is a priority issue for Egypt, given the successful experiences of German schools and universities in Egypt and the high quality education they offer,” said Al-Sisi.

*A version of this article appears in print in the 1 November, 2018 edition of Al-Ahram Weekly under the headline: Tapping mutual benefits with Germany

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