Egypt eyes Economic Recovery with $8bn Suez Canal project

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Egypt, one of Africa’s biggest economies and tourist destinations, has started its path to economic recovery away from the impact of the 2011 crisis, with the construction of its New Suez Canal, which is set to be commissioned in Cairo this August.

Press and Information Officer at the Egyptian embassy in Nigeria, Ahmed Maher, informed The Nigerian Guardian that the new project which is costing the country about 60 billion Egyptian pounds (US$8.4 billion), will double the traffic of cargo across Africa to Europe, with the prospect of helping Egypt take a huge economic rebound which is expected to trickle down to the small business owners that will trade along the 70 kilometre project.

Already, about 41,000 people have been engaged with the construction which began 10 months ago. Maher said the new canal will double the economic contribution that the old canal is bringing in, especially with the additional six tunnels for cars and rails that are attached.

“New Suez Canal is the name of a waterway project in Egypt, expanding the existing Suez Canal between the Mediterranean Sea and the Red Sea. It was launched simultaneously with plans to build six new tunnels under the canal and to transform a 76,000 km area on both banks of the canal into an international logistics, commercial and industrial hub that would create one million jobs”.

“The Suez Canal is the shortest shipping route between Europe and Asia, as it acts as an alternative to Cape of Good Hope route. The new works increase trade alongside the canal. The enlarged canal will allow ships to sail in both directions at the same time over much of the canal’s length. This is expected to decrease waiting hours from 11 hours to three hours for most ships and to double the capacity of the Suez Canal from 49 to 97 ships a day.

“The New Suez Canal works are expected to be 72 kilometre, 35kilometre of dry digging, and 37 kilometre of expansion and deep digging. Six new tunnels for cars and trains are also planned to end the isolation of the Sinai peninsula, connecting it better to the Egyptian heartland”, Maher said.

The Suez Canal area development and the Second Suez Canal project are seen as the most important drivers of economic recovery for Egypt, with the hope that it will be an economic turning point away from the instability that has affected it in recent years. “The Suez Canal area development project aims to attract private investment to the area surrounding the canal, transforming several cities into a regional and hopefully, global logistics hub”.

Egypt, with its ancient and rich history, opened the original Suez Canal for navigation in the 19th century. According to Maher, the canal has survived Egyptian government transitions, two World Wars, and regional instability by remaining an essential part of world trade networks. And today, seven per cent of world trade runs through the Egyptian waterways through the Suez canal.

The new canal is therefore, being constructed to run parallel to the old one to further harness the economic benefits. It is expected that in the next eight years, the Suez Canal will have 100 ships running through it on a daily basis, to generate between $12 billion and $13 billion of increased revenue over the same period.

As a precursor to the launch of the new canal which will be commissioned by President Abdel Fattah el-Sisi in the presence of other world leaders, the Egyptian government in March, hosted a major economic summit aimed at encouraging international corporations to invest in Egypt’s growing economy. Minister of Investment Ashraf Salman and Minister for International Cooperation Naglaa Al-Ahwany unveiled a bouquet of $12 billion investment opportunities for 20 projects in different sectors.

source: The Nigerian Guardian