Egypt signed two memoranda of understanding (MoU) this week with Djibouti and Angola covering bilateral relations in terms of investments and cooperation in agriculture, tourism, industry, infrastructure, mining, construction, and health, respectively.
The two agreements were signed during the Investment for Africa Forum (IAF) held in Egypt’s New Administrative Capital earlier this week. Organized by the Ministry of Investment and international cooperation, the forum brought together government representatives and individuals from the private sector, civil society, and international financial institutions to talk about inclusive and sustainable growth in the African continent.
The forum was just one sign among many of increasing volumes of business taking place between countries on the African continent.
According to Egypt’s Central Agency for Public Mobilisation and Statistics (CAPMAS), the government statistics agency, total trade exchanges between Egypt and the African countries increased to $3.2 billion during the first eight months of 2018, around $700 million more than the year before.
The value of Egyptian exports reached $2.8 billion between January and August of 2018. The value of imports to Egypt from the African countries during the same period was $1.3 billion.
Egypt “is located at a strategic north-eastern position on the African continent, indeed at the ‘crossroads’ to both the Middle Eastern Gulf countries as well as the European states along the Mediterranean,” Harry Broadman, chair of the emerging markets practice at the Berkeley Research Group in the US told Al-Ahram Weekly.
“It thus provides a natural and advantageous, outlet to those important markets for African countries located in the middle and southern portions of the continent who wish to export northwards to Europe and the Middle East.”
This week’s forum was not only about Egypt’s economic ties with Africa, however, but also focused on enhancing intra-African trade and business activities.
In a speech at the event, President Abdel-Fattah Al-Sisi called for finding “solutions based on regional integration to transform Africa into a global industrialization hub to provide job opportunities for African citizens and attract foreign investments.
“Africa’s success in achieving the UN Sustainable Development Goals requires accelerating the pace of infrastructure development through cross-border projects, which are among the priorities of the African Union, including the project linking Cairo to Cape Town, the north-south electricity-linking project, and linking the Mediterranean Sea to Lake Victoria,” Al-Sisi added.
A major initiative that could help to bring Africa closer together is the African Continental Free-Trade Area (AfCFTA), which entered into force on 30 May. As a result, many of the “restrictions and barriers hindering intra-African trade are being dismantled, which means that investors can go into the continent without difficulties,” Obi Emekekwue, global head of communications at the Afreximbank, said.
AfCFTA will lead to the “opening up of the entire African market as a single market,” he said.
“As one of the most advanced economies in Africa, Egypt’s investors stand a unique chance to benefit from expanding into other African countries because Egyptian industries can more cost-effectively meet the needs of many of these countries in terms of many of the products they currently import from outside the continent,” he added.
Emekekwue emphasized the increasing consumption potential of the continent because of the “increasing growth and expansion of the African middle class”.
Broadman agreed on AfCFTA’s potential, saying that if free-trade rules were implemented across the continent, this would vastly open up flows of intra-African trade and investment.
“Unlike in other regions of the world, most African countries trade more with countries outside the continent than between each other at the moment,” he said.
According to the UN Conference on Trade and Development’s (UNCTAD) Economic Development in Africa Report 2019, AfCFTA could generate welfare gains of $16.1 billion and boost intra-African trade by 33 percent in its transition phase alone.