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Egypt: Fostering trade with Sudan

New efforts are being made to boost economic and trade relations between Egypt and Sudan

Safeya Mounir , Wednesday 27 Jan 2021
Fostering trade with Sudan
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Egyptian Minister of Trade and Industry Nevine Gamea met with her Sudanese counterparts to mull over increasing bilateral trade cooperation when she attended the Khartoum International Fair from 21 to 28 January in the Sudanese capital.

Egypt was the guest of honour at the fair, and Gamea’s meetings were part of Egypt’s determination to open a new page in its trade relations with Sudan.

Topping the agenda at the meetings was renewing the licence for the Egyptian Trade Centre in Sudan, this helping to make Egyptian goods available to Sudanese consumers at a lower cost and in a shorter time.

Gamea met with Madani Abbas Madani, Sudan’s minister of industry and trade, and Hashim Mohamed bin Auf, minister of infrastructure and transport, to discuss opportunities for economic cooperation and developments in the commercial, industrial, and transport sectors.

One of the main challenges facing Egyptian exporters and hindering the flow of trade was the sometimes poor quality of the road network in Sudan, a member of the Egyptian-Sudanese Business Council told Al-Ahram Weekly.

He said that the Egyptian government’s intention to establish an integrated transportation company to establish regular transport lines with Sudan would boost bilateral trade, since Egyptian exporters have great potential in Sudanese markets if they can overcome transport problems.

According to Gamea, trade between Egypt and Sudan last year reached $862 million, $496 million of which were Egyptian exports to Sudan and $366 million were imports. The most important items traded between the two countries are chemicals, manufactured products, machinery and equipment, food products, textiles, transportation materials, livestock, and agricultural products.

Trade with Sudan is already on the rise. In 2019, trade exchanges between Egypt and Sudan recorded around $675 million, up from around $611 million in 2018, an increase of 10.4 per cent. Egyptian exports to Sudan made up 1.5 per cent of total Egyptian exports in 2019, while imports from Sudan were 5.1 per cent of total Sudanese exports.

Plastic products were prominent on Egypt’s export list to Sudan in 2019. Exports worth around $81 million were recorded in 2019, up from around $77 million in 2018. Egypt’s exports to Sudan represent about four per cent of its total plastic exports.

Iron and steel come second on the list of Egypt’s exports to Sudan, with fertilisers occupying third place followed by glass, utensils, and pharmaceutical products.

Constituting almost 98 per cent of Sudan’s exports to Egypt in 2019 were seeds and fruit, livestock, cotton, and meat.

In August 2020, Egyptian Prime Minister Mustafa Madbouli travelled to Sudan to discuss with Sudanese counterpart Abdalla Hamdok the transport challenges facing Egyptian exporters to Sudan. They agreed on the need to restructure the Nile Valley Authority for Riverine Navigation (NVARN) to increase its efficiency and upgrade its fleet.

NVARN is an Egyptian-Sudanese organisation that transports passengers as well as goods. It was established in 1975 as the only international transporter working on Lake Nasser.

Egypt and Sudan have also discussed a project to link the railways of the two countries to increase economic and trade cooperation, develop maritime navigation, and update the cooperation agreement on land transport between Cairo and Khartoum.

Madbouli’s visit to Sudan resulted in an agreement to remove obstacles hindering the flow of trade, especially concerning roads leading to land ports. Putting this deal into effect will be a crucial step in achieving economic integration between Egypt and Sudan.

Some 21 Egyptian companies participated in this month’s Khartoum International Fair, regarding it as an opportunity to increase their exports to Sudan. The companies specialised in the commercial and service sectors as well as in engineering, food, construction, chemicals, crops, and leather.

Ahmed Gaber, a member of the Egyptian-Sudanese Business Council, said that despite the Common Market for Eastern and Southern Africa (COMESA) and the Greater Arab Free Trade Area (GAFTA) agreements to which Egypt and Sudan are signatories, there are still 54 Egyptian products on which customs are imposed when entering Sudan, constituting a hindrance to Egyptian exports.

Regulations related to the Covid-19 currently prevent vehicle traffic across the Egyptian-Sudanese border. Exporters offload their cargoes on the border, from where they are transported by the other country’s vehicles.

A problem facing Sudanese importers is a shortage of foreign currency, which affects their ability to import Egyptian products, Gaber said.

Were the Egyptian and Sudanese central banks to reach an agreement on credit arrangements, Egyptian exports could win the lion’s share of Sudan’s imports, estimated at $7 billion annually.

The establishment of an Egyptian industrial zone in Sudan was another topic of discussion at the meetings between Gamea and her Sudanese counterparts. A feasibility study of the zone has been completed and is awaiting input from the Sudanese side, she said.

The industrial zone is expected to attract Egyptian investments into Sudan, Gamea said.

According to the Central Bank of Egypt (CBE), Sudan’s investments in Egypt were $1.9 million in 2018-19, up from $300,000 in 2017-18, an increase of 53.3 per cent. These investments are in the fields of industry, finance, services, agriculture, construction, tourism, and communications.

Egypt established 229 projects in Sudan between 2000 and 2013, representing a total investment of $10.8 billion. The projects focused on the industrial, agricultural, and service sectors.

The moves to boost prospects for bilateral cooperation with Sudan are part of Egypt’s desire to bolster cooperation with the African countries in the infrastructure, electricity, agricultural, industrial, and irrigation sectors.

Sudan is Egypt’s southern gateway to Africa, making it even more necessary for the two countries to cooperate fully in boosting their respective roles on the African continent.

 

*A version of this article appears in print in the 28 January, 2021 edition of Al-Ahram Weekly

 

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