The decision to restore diplomatic relations between Egypt and Turkey offers fresh prospects for enhancing bilateral trade relations, which continued despite the severing of political ties after the Muslim Brotherhood’s ouster from power in Egypt in 2013.
A statement issued by the Egyptian Foreign Ministry earlier in July signalled a promising turn towards “re-establishing normal relations [between the two countries], reflecting Egypt and Turkey’s shared keenness to boost relations for the benefit of both peoples.”
In mid-February, the Egyptian cabinet said Turkish companies had pledged to invest $500 million in Egypt after representatives had met with the Egyptian prime minister for the first time in a decade.
According to the Foreign Ministry statement, the Turkish companies, some of which are already present in Egypt, are engaged in various sectors such as the development of industrial zones, spinning and weaving, ready-made clothing and sportswear, medical equipment, and electrical appliances.
The statement said that Turkish investments in Egypt have reached $2 billion.
Nihad Akinci, chairman of the Egyptian-Turkish Businessmen Association, anticipates a surge in Turkish investments in Egypt following the decision of several companies to increase their investments by $500 million this year, either by launching new companies or expanding existing ones.
The association, in collaboration with several commercial chambers such as the Ready-Made Garments Chamber of the Federation of Egyptian Industries, is preparing opportunities for Turkish investments in the field of textiles and ready-made clothes.
Meetings between the two sides will be arranged at a later date, Akinci added, with the meetings expected to take place within the next two months.
The upcoming period will also see meetings between businessmen from both sides in other sectors beyond spinning, weaving, and ready-made clothes. Turkish investments in Egypt encompass diverse activities, such as home appliances under the Beko brand, chemicals and health products, and the BIM discount stores, he pointed out.
The earlier severing of Egyptian-Turkish ties at the political level had not affected Turkish investments in Egypt, Akinci said. In fact, some companies had expanded their businesses during those times. The new announcement of enhancing relations between the two countries will reflect positively on investments, he added.
The effects of the new policy have already been evident in the recent increase in the number of Turkish tourists visiting Egypt after the announcement that Turkish citizens can acquire visas at Egyptian airports regardless of age. In late march, the Egyptian authorities declared a host of new facilities for tourists from Turkey, Iran, and Israel.
The Central Agency for Public Mobilisation and Statistics (CAPMAS) has reported that there was a 14 per cent increase in the value of trade between Egypt and Turkey in 2022, reaching $7.7 billion and up from $6.7 billion in 2021.
The trade balance between the two countries is in Egypt’s favour at $250 million, the agency added.
According to CAPMAS, Turkey is a top importer from Egypt, with 10 commodities accounting for 82.7 per cent of Egypt’s total exports to Turkey in 2022 and amounting to $3.31 billion.
These commodities include fuel, mineral oils, plastics, inorganic chemical products, and fertilisers. The most important commodities that Egypt imports from Turkey are iron and steel.
The value of Egypt’s imports from Turkey decreased to $3.72 billion in 2022, down from $3.74 billion in 2021. Turkey ranked seventh on the list of exporting countries to Egypt over the past year.
In April 2022, former Turkish foreign minister Mevlüt Çavuşoğlu said Ankara targeted increasing the level of trade exchanges with Cairo to $15 billion. During a joint press conference with his Egyptian counterpart Sameh Shoukri, Çavuşoğlu stressed Turkey’s efforts to stimulate investments in Egypt, particularly in the tourism sector.
“We will also diversify the relationship between the two countries, particularly in the field of energy, and develop joint economic relations with Egypt,” he added.
Adel Lamei, who heads the Egyptian side of the Egyptian-Turkish Business Council, said that the restoration of diplomatic relations between Egypt and Turkey would facilitate communication and procedures to obtain visas on both sides.
He added that Turkey was among the few countries where the trade balance is in favour of Egypt, thanks to the recent increase in the volume of gas exports.
He said that in recent years there has been a significant expansion in Turkish investments in various fields in Egypt, including in the textile industries, food, services, and chemicals. He expects a further increase in the volume of these investments, particularly with the state’s recent decisions in favour of the private sector, such as the non-exemption of state-affiliated companies from fees and customs.
Lamei added that Turkish investors recognise the vast opportunities available in Egypt, particularly in the light of the international trade agreements that Egypt has signed, among them the Agadir Agreement, a free-trade agreement between Egypt, Jordan, Morocco and Tunisia, membership of the Common Market for Eastern and Southern Africa (COMESA), and free trade agreements with the EU.
* A version of this article appears in print in the 13 July, 2023 edition of Al-Ahram Weekly