EGYPT - AFRICA TRADE RELATIONS!!

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1 EGYPT - AFRICA TRADE RELATIONS OVERVIEW REPORT EVENT NOTICE N GAGE CONSULTING WILL BE HOSTING THE FIRST EGYPT - AFRICA TRADE RELATIONS WORKSHOP ON OCTOBER 13TH, 2015 AT THE FOUR SEASONS NILE PLAZA HOTEL. FOR MORE INFORMATION PLEASE CONTACT US AT DEBATES@NGAGE-CONSULTING.COM OR CALL US ON /

2 TABLE OF CONTENTS 1. Egypt & Africa 3 1. A Multi-pillar strategy to tap African potential Trade Liberalisation Export Promotion and Trade Deals Investing in Africa 2. Tripartite Free Trade Agreement (TFTA) Modalities of tariff liberalization Elements of the post-signatory roadmap Tripartite Mechanism for Eliminating Non Tariff Barriers (NTBs) 3. Egypt & COMESA Key COMESA Institutions COMESA Business Council Regional Investment Agency Preferential Trade Area (PTA) Bank COMESA Clearing house 4. EAC & SADC Key Countries South Africa Tanzania Nigeria 5.4. Sudan 6. Conclusion 14 2

3 Introduction Over the past few years, a number of African economies have grown considerably and continue to grow. In 2014, Africa s population stood at a little over 1 billion people with a total GDP of USD2.5 trillion. In 2013, African exports to the world reached nearly USD600 billion, while imports totalled USD605 billion 1. The Ministry of Industry, Trade and SMEs (MITS) has recently issued a comprehensive study of Egypt s trade relations with Africa. It examines trade developments with various economic blocs and trading partners during This report provides a summary to the study s key findings, as well as an analysis of the current state of Egyptian - African trade and investment relations. 1. EGYPT & AFRICA Today, Africa s global economic and strategic importance is rapidly increasing. With 54 countries and a population of over a billion people, it is the second largest continent in terms of area and population, in addition to being rich in resources. As 70% of the population being under the age of 25, and the average age being 18 years, Africa has one of the youngest populations worldwide. This has a direct impact on the economic, social and political issues in the continent. It has become the fastest growing continent; as 10 African countries fall within the list of the 64 fastest growing countries in the world for the year 2013/2014. Although the East African region comes second after West Africa in terms of economic growth rates, it is expected to grow at 6.2% in 2015, compared to 6% in With regard to foreign investment, Africa attracted USD55 billion of the world s total USD1.26 trillion of foreign direct investments in Egypt has long played a pivotal role in Africa. Historically, it enjoyed strong economic, social and political ties with its African counterparts. It supports efforts to achieve the regional integration process adopted by the African Union in collaboration with established economic blocs in the Top 10 Egyptian Export Destinations in Africa (2014) Algeria 17% Libya 30% Morocco 15% Sudan 12% Kenya 7% Tunisia South Africa 6% Nigeria 4% 3% Ethiopia 3% Ghana 2% Source: Ministry of Trade, Industry and SMEs African continent, especially the Common Market for Eastern and Southern Africa (COMESA), the South African Development Community (SADC) and the East African Community (EAC). As the continent is quickly developing, the Egyptian government is seeking to reinforce Egypt s trade relations with its African partners. In 2014, Egypt s 1 Ministry of Trade, Industry and SMEs. 3

4 exports to Africa reached USD3.8 billion (14% of total Egyptian exports); while imports from Africa stood at USD1.2 billion (1.7% of total imports). The Government of Egypt (GoE) thus aims at strengthening bilateral and multilateral ties with African nations, especially Nile Basin countries. Several Egyptian companies are investing heavily in Africa and are repositioning Egypt as an African powerhouse. For example, the Arab Contractors company is executing several highways in East Africa that will eventually forge into the much ambitious Cairo-Cape Town highway. Sewedy Electric has become one the leading companies in providing electric power stations and cables in the continent, while financial institutions such as Qalaa Holdings are being positioned as some of the continent s leading investment vehicles. Henceforth, the GoE has devised a multi pillar strategy that aims at increasing economic cooperation and integration with African countries, with a focus on leading regional blocs A MULTI-PILLAR STRATEGY TO TAP AFRICAN POTENTIAL TRADE LIBERALISATION The GoE has worked intensely to foster trade liberalisation and economic integration within the continent. As part of the COMESA, the GoE is seeking to eliminate all remaining trade barriers imposed by member states, as well as incentivise new countries to become members. It also aims at reinforcing cooperation between the Egyptian Organisation for Standardization and Quality (EOS) and its African counterparts, so as to facilitate access to product quality standards and specifications, thus reducing technical barriers to trade. Furthermore, the GoE will increase industrial and trade training programs between Egypt and COMESA member states, as well as Nile Basin countries. In addition, the GoE exerted strong efforts to launch the Tripartite Free Trade Area (See N Gage Consulting s report on the TFTA), where the agreement was signed in Sharm el Sheikh on June 10 th, EXPORT PROMOTION AND TRADE DEALS While considerable effort has been made to remove trade barriers, there remains much room for improvement in promoting Egyptian products in Africa. Henceforth, the MITS strategy includes several components that aims at stimulating trade with African countries. There are many challenges facing Egyptian producers to effectively penetrate African markets. First and foremost, there is a lack of consistent transportation and shipping services between Egypt and many African countries. Railway services are also of poor quality in many countries, while existing shipping routes can be expensive and time consuming. On average, transportation costs in Africa are significantly higher than in developing countries worldwide, and even higher than in industrialised countries. Shipment routes could take up to 28 days for delivery. Thus, in 2009, the GoE launched a 50% subsidy on land and sea shipping costs to Africa, in order to incentivise Egyptian exports to the continent. However, further efforts are needed to create a reliable and effective freight network between Egypt and key African countries. Second, there is a difficulty to penetrate African markets in light of fierce competition from East-Asian products. Since most African consumers are cost-sensitive due to their low income, Egyptian products lose their 4

5 competitiveness against cheaper ones. Furthermore, many countries maintain strong relationships with their previous colonial powers, which reflects on trade and investment facilitation. Also, Egyptian presence in African trade conferences and exhibitions is weak, while marketing and promotion campaigns in African media are practically null. In addition, there is a lack of data and information available to Egyptian companies on a number of issues, such as consumer behaviour in African countries, customs duties for products, quality standards and requirements, project tenders issued by African governments, etc. To confront this issue, the MITS is exerting efforts to create an online database that specifies all customs duties, quality standards and government projects tenders in African countries, namely members of the COMESA. It also plans to launch several exhibitions, conferences and trade missions aimed at boosting trade with Africa and creating business networks between Egyptian and African companies. In addition, financial services remain a strong barrier to trade. Several Egyptian companies remain sceptical of exporting to some African countries, as they cannot guarantee their payments. This issue is exacerbated by the absence of Egyptian banks in Africa, which represents further difficulties to exporters. To tackle this issue, regional economic blocs have created trade finance banks to enhance the security and efficiency of financial services. For example, the COMESA launched the Preferential Trade Area Bank for this purpose (see page 9) INVESTING IN AFRICA Africa has experienced unprecedented growth rates in recent years, with countries such as Ethiopia, Congo DR, Tanzania, Nigeria and Kenya leading the way. Although FDI inflows to some North African countries decreased in recent years due to political instability, many Sub-Saharan countries attracted growing interest from foreign investors. In light of this growth, African governments are seeking to diversify their economies as most remain heavily reliant on agriculture and mineral resources. This has been expressed through Government strategy announcements, regulatory reforms and new incentive structures offered to investors. In 2010, the Government of Ethiopia launched an agriculture-led industrialisation strategy, labelled the Growth and Transformation Plan (GTP), that has seen the country reach two digit-growth rates in the past few years. However, the continent still faces major impediments to attracting foreign investments. First and foremost, corruption and risks of political instability remain high in many African countries. Second, there remains significant barriers to purchasing foreign currencies, echoed by the lack of financial clarity by many governments. Despite these impediments, many African countries have implemented investment-friendly regulations and can offer highly lucrative investment opportunities. Several Egyptian companies currently manage a significant investment portfolio in Africa. Most notably, Qalaa Holdings and Sewedy Electric have a diversified and expansive investment blueprint in the continent. Furthermore, the GoE regards Nile Basin countries as a strategic food basket, where arable land and water resources are abundant. Following the recent feud with Ethiopia over the Renaissance Dam, it has become evident that Egypt needs to play a significantly more important role in this region. A key pillar of the GoE s economic strategy in Africa is thus to encourage agricultural and infrastructure investments, in order to ensure the country s food security and water resources. Recent trips by President Abdelfattah El Sisi to both Ethiopia and Sudan have 5

6 emphasised this strategy, while further actions in terms of investments are expected to be taken as Sharm el Sheikh hosts the 2015 Invest in Africa Conference in November. 2. TRIPARTITE FREE TRADE AGREEMENT (TFTA) The Lagos Action Planof 1980 and the Abuja Accords of 1991 sparked the idea of establishing what was then called the United States of Africa. Inspired by the EU model, member-states of the three major trade blocs -EAC, COMESA and SADC- started taking solid measures towards establishing the largest African customs union. The establishment of the TFTA marks the first step to create the customs union. The TFTA is widely saluted for its emphasis on many of Africa s most chronic problems. Egypt is presented with the opportunity of establishing a strong and constructive relationship with African countries that may have great yields. Nevertheless, it is crucial for the TFTA member-states to try to minimize impediments of integration, such as the negative lists. Tools like the negative lists and non-tariff barriers, put forth by protective countries, do not serve the initial purpose of integration. Member-states of TFTA must maintain the mind-set of economic integration rather than the classical protectionist trade policies in order to yield the most out of an agreement this size. Beyond TFTA s trade benefits, the agreement will open new opportunities for investments in new untapped markets, in sectors such as energy, transportation and logistics, oil and gas. Yet, the private sector in Egypt does not have the required business intelligence reports and market studies that would support this cause. Facilitated by the TFTA, the Egyptian government must lead on the initiative of investing in Africa, by making required data and research available for the Egyptian private sector to start unleashing Africa s potential. The launch of the TFTA from Sharm El Sheikh is a note of commitment from the Egyptian side, where Africa is the new pathway for economic growth. It was evident since early 2015 that Egypt is directing its attention towards the African front, reflected in the wide African presence at the Egypt Economic Development Conference (EEDC) in March. The growing economic relation with Sudan and Ethiopia is yet another manifestation of a new course of action that the current administration holds MODALITIES OF TARIFF LIBERALIZATION During the second meeting of the sectoral ministerial committee for interior, trade, finance, customs, economic affairs and of the three blocs, which was held on July 10, 2013 in Mauritius to adopt mechanisms of tariff cuts for the agreement, the following clauses were agreed upon: Member States that exchange bilateral customs exemptions within the bloc will not enter into negotiations on the liberalization of the tariff. 6

7 Member States that do not have any bilateral tariff reductions or exemptions will enter into negotiations to liberalise tariffs on the basis of tariff lines listed for each tariff book of the State Customs Tariff. It was agreed that from 60% to 85% of the tariff lines will be liberalised upon entry into force, and that States are committed to reducing 85% of the number of tariff lines over a period of 5 to 8 years; while the remaining 15% of tariff lines will be the subject to future negotiations ELEMENTS OF THE POST-SIGNATORY ROADMAP The key focal areas of the TFTA Post Signature Implementation Road Map consist of the following: Notification of the World Trade Organisation Finalisation of negotiations on outstanding areas of the TFTA agreement Designation and Notification of TFTA Focal Points Ratification of the TFTA Agreement Depository of the Instruments of Ratification Commencement of implementation of the TFTA Agreement Publicity and Sensitisation Capacity Building Preparation of a TFTA Resource Mobilisation Strategy TRIPARTITE MECHANISM FOR ELIMINATING NON TARIFF BARRIERS (NTBS) The Tripartite Regional Economic Communities (RECs) are implementing Non-Tariff Barriers (NTBs) for reporting, monitoring & eliminating mechanisms which incorporate concrete timelines for the removal of NTBs. All three RECs (COMESA, SADC & EAC) have established NTB monitoring mechanisms to address NTBs through establishing the National Monitoring Committees (NMCs). Each member state should establish National Focal Points from the public & private sectors. In addition, the Tripartite NTB Website enables stakeholders to report and monitor the resolution of barriers encountered as they conduct their business in the COMESA, EAC and SADC regions. It enhances transparency and easy follow-up of reported and identified NTBs and NTMs. This web-based NTBs reporting, monitoring and eliminating mechanism is accessible to economic operators, government functionaries, academic researchers and other interested parties. 7

8 3. EGYPT & COMESA Prior to joining the COMESA, Egypt had a trade deficit of nearly USD100 million with its member states. After joining the COMESA, this trade deficit gradually transformed into a significant surplus of nearly USD2.4 billion in Most COMESA economies are structured to export raw materials and import finished goods. Egypt thus has a competitive advantage in producing finished goods, namely food products, pharmaceuticals, engineered products, home appliances, construction materials, ceramics, steel, aluminium and leather products. In 2014, the unified customs code has been ratified by the 32nd COMESA Ministerial Congress in Kinchasa. Further integration efforts are still being pursued, as Central Banks from all member states are developing a payment system that would guarantee payments to exports and remove impediments caused by the lack of credibility of some commercial banks. To be eligible for COMESA customs exemptions, there are a few requirements that need to be fulfilled. For example, some commodities should be fully imported from a member state (e.g. agricultural products, animals, fisheries and fuels). Alternatively, for commodities manufactured or produced from materials imported from non-comesa member states, they can only be eligible for customs exemptions provided that the value of the imported materials does not exceed 60% of the total Cost, Insurance and Freight (CIF) value; or that the added-value produced in the COMESA member-state must be at least 35% from the commodity cost EX-Works (direct from the factory or place of manufacturing). To certify the fulfilment of these requirements, exporters should issue a Certificate of Origin from the General Organisation for Import and Export Control (GOIEC). COMESA FACTS: - THERE ARE 19 MEMBER STATES: EGYPT KENYA SUDAN LIBYA ZAMBIA MALAWI ZIMBABWE ETHIOPIA DJIBOUTI MADAGASCAR UGANDA ERITREA CONGO DR BURUNDI RWANDA SEYCHELLES COMOROS ISLANDS SWAZILAND MAURITIUS - 15 STATES FULLY ADOPTED CUSTOMS EXEMPTIONS FOR COMESA PRODUCTS. - EGYPTIAN PRODUCTS HAVE 80% DISCOUNT ON CUSTOMS DUTIES IN ERITREA, 10% IN ETHIOPIA. - INCLUDES OVER 456 MILLION CONSUMERS. - COMBINED GDP REACHED USD638.6 BILLION IN MEDIAN POPULATION AGE IS 20 YEARS. 8

9 3. 1. KEY COMESA INSTITUTIONS Within the COMESA, there is a number of institutions that play a significant role in promoting trade and investment between member states COMESA BUSINESS COUNCIL The COMESA Business Council was created in It plays a key role in supporting the private sector in COMESA member states. It also provides a match making service and B2B activities REGIONAL INVESTMENT AGENCY In light of the GoE s vision to further integrate African economies, namely members of the COMESA, it actively pursued the creation of the Regional Investment Agency (RIA), and is hosting its headquarters at the Ministry of Investment s headquarters in Cairo. The RIA is responsible for promoting investment opportunities within COMESA member States, as well as to international investors. It aims at positioning the COMESA as an integrated market, whereby investments can operate flexibly and efficiently. Furthermore, it is tasked with advising COMESA member governments on policy development to enhance their investment climate and boost investor confidence. It also services an online portal that provides investors with the relevant data and information required for investing in the COMESA PREFERENTIAL TRADE AREA (PTA) BANK The main objective of the Bank is to facilitate the export and import to and within the COMESA region, through the provision of trade finance facilities that are specially designed to ensure exporters get paid for their exports, based on its experience in dealing in various diverse markets and banking practices that made it a reliable entity in providing financial solutions for international trade. The current members are: the African Development Bank, Burundi, China, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia, Zimbabwe and the Democratic Republic of Congo COMESA CLEARING HOUSE The clearing house is part of the settlement of regional payments system and based in Harare, Zimbabwe. It allows businesses to invoice their export bills in national currencies or through the COMESA central banks. Transactions are mostly settled on a daily basis, except net accounts receivable hard currency which are settled every two months. The Mauritius Bank is currently executing the COMESA Clearing House s duties until its official establishment. 9

10 4. EAC & SADC The East African Community (EAC) and the South African Development Community (SADC) are two key regional trading blocs for Egypt. Although it is not a member in either blocs, the newly announced Tripartite Free Trade Area is expected to give Egypt greater access to the East and South African markets. EAC FACTS: - 5 MEMBER STATES: BURUNDI UGANDA RWANDA KENYA TANZANIA - EGYPT S EXPORTS TO EAC IN 2014: USD352 MILLION. - EGYPT S IMPORTS FROM EAC IN 2014: USD335 MILLION. services sectors over the past decade. Despite the COMESA having taken concrete steps towards customs exemption and trade liberalization, it is arguable that the EAC and SADC are ahead in terms of economic and political integration. Both blocs aim at issuing a single currency - respectively - as the Protocol for the Establishment of the East African Monetary Union was signed by the heads of State in 2013, while the SADC s regional indicative strategic plan set 2016 as the date to achieve the monetary union milestone (although it probably will be delayed). The SADC expects to issue a single currency in 2018, although this project will also probably be delayed, as preceding milestones are yet to be achieved. Furthermore, some countries are members of various economic blocs, with some being signatories to two different single currency projects (such as Tanzania). This has caused delays to the single currency project s implementation and is considered to be one of the main underlying issues facing it. The EAC economies have a very similar structure, as they mostly rely on agriculture and mainly export raw materials and natural resources. The majority of SADC countries follow the same trend, with the exception of South Africa which has developed strong manufacturing and Besides its economic goals, the SADC also aims at increasing cultural integration among member states, as well as efficiently managing natural resources and protecting the SADC FACTS: - 15 MEMBER STATES: ANGOLA LESOTHO MAURITIUS SEYCHELLES TANZANIA MADAGASCAR MOZAMBIQUE SOUTH AFRICA ZAMBIA CONGO DR MALAWI NAMIBIA SWAZILAND ZIMBABWE - EGYPT S EXPORTS TO SADC IN 2014: USD333 MILLION. - EGYPT S IMPORTS FROM SADC: USD203 MILLION. environment. In terms of political and security cooperation, the EAC has already begun issuing a single visa for foreign tourists. 10

11 5. KEY COUNTRIES SOUTH AFRICA Egyptian Trade with South Africa (in USD) Exports Imports Source: Ministry of Trade, Industry and SMEs South Africa is the continent s second largest economy with a GDP of USD350 billion in 2013, while it has the highest GDP per capita at USD6,617. It is considered a major potential trade and investment partner for Egypt, as Egyptian exports to South Africa reached their USD1 billion peak in 2011, before dropping to USD145 million in 2014 in the aftermath of the revolution. In 2009, a Memorandum of Understanding (MoU) was signed between the Egyptian and South African governments, which stipulated the creation of four joint-committees to increase cooperation on investments, agriculture, manufacturing and quality standards. In addition, the First Egyptian-South African Business Forum was launched in Johannesburg in February 2013, with the Second Forum expected to be held in Egypt. However, there remain several barriers to trade - namely for Egyptian exports to South Africa. In terms of logistics, there is a shortage of reliable and regular shipping and freight services to South Africa, which is echoed by high transportation costs (although this is a chronic problem for most of the continent). As for market access, many East Asian and European countries have permanent exhibitions in South Africa to promote their products, which undermines Egyptian products ability to compete. In addition, the South African government heavily protects key industries such as spinning and weaving, finished clothes and automobile industries from foreign competition, through imposing high tariffs, custom duties and providing subsidies. Nevertheless, Egyptian companies have previously succeeded in achieving significant exports to South Africa, as demonstrated in 2011, while Egypt still maintains a trade surplus despite the recent political unrest and economic stagnation. 11

12 5. 2. TANZANIA In the past few years, Tanzania has become a significant economic player in East Africa, with a GDP reaching USD50 billion in It is a member of the EAC and SADC communities, as well as being an access route from the Indian Ocean for a number of land-locked countries. Despite Egypt s trade with Tanzania being comparatively low to other countries, it gains its significance due to its high potential for becoming a regional trade and investment hub. In 2014, Tanzania enjoyed a 7% growth rate, a 21% (of GDP) savings rate, and a public debt of 42% (of GDP) - all healthy indicators of a growing economy that is ready for investments. The country remains a largely agriculture-based economy, as it accounts for 46% of GDP and nearly 80% of the total workforce. However, Egyptian products face various challenges to be exported to Tanzania. The chronic issue of logistics in Africa is further amplified in Tanzania due to the high costs of using port facilities, high customs duties on some products, and the country s adoption of the pre-release inspection system. In addition, most Egyptian companies fail to identify local agents, which limits their ability to apply for tenders or launch their own projects; while Egyptian products are not promoted as Egypt does not participate in the Dar Es Salaam International Trade Fair. Consequently, more interest should be exerted from the Egyptian side in the near future in order to access this growing and promising market Egyptian Trade with Tanzania (in USD) Exports Imports Source: Ministry of Trade, Industry and SMEs NIGERIA Egyptian Trade with Nigeria (in USD) Exports Imports Source: Ministry of Trade, Industry and SMEs Nigeria has become Africa s largest economy with a GDP amounting to USD568 billion in However, with a population of 180 million people, the GDP per capita stood at nearly USD3200 in the same year. Its exports mostly comprise of crude petroleum, petroleum gas and refined petroleum, as it is a member of OPEC. With a growing GDP and a large population, Nigeria is arguably Africa s most significant market. As the country is heavily reliant on petroleum exports, the Nigerian Government is now seeking to diversify its economy by attracting foreign investments in infrastructure projects, telecommunications and banking services. Since many Egyptian companies have strong expertise in these sectors, Nigeria thus represents a highly promising investment destination. In terms of trade, Egypt maintains a significant trade surplus that amounted to USD95 million in Main exported products include 12

13 copper and steel products, polypropylene and other plastics, as well as construction materials. There are significant opportunities for further products to be exported to Nigeria - namely pharmaceuticals, food and beverage products, spinning and weaving products, as well as engineered goods and home appliances. However, the Nigerian Government imposes trade barriers on a number of products, mostly in the food and beverage industries, agricultural products, spinning and weaving products and cement. This protectionist policy is amplified by timely and costly port services and bureaucratic processes for exporters to issue the required customs clearances, as well as rampant corruption in the customs authority. Further cooperation and dialogue between Egyptian and Nigerian governments and the respective business communities would be beneficial to reduce barriers to trade and boost a much needed economic cooperation between the two countries SUDAN Sudan is often considered as Egypt s backyard, as it stretches along its southern border. Historically, both countries have strong economic, political and social ties. Sudan is a member of he COMESA and the GAFTA, and also has several bilateral trade agreements with Egypt, which reinforces its economic integration. Nevertheless, the Egyptian Government claims that its Sudanese counterpart does not fully apply the requirements of its FTAs, which restricts trade opportunities. For example, the Sudanese Minister of Trade s decision Nº12/2010 that stipulates the customs duty exemption of 37 products from a total of 53 products indicated by the COMESA agreement was not implemented in practice. Furthermore, the Sudanese Government refuses to provide customs duty exemption to a number of Egyptian products under the pretext of not having fulfilled the value added requirements, although the Egyptian Government denies those claims. For example, a delegation from the Sudanese customs authority had agreed to visit the Toshiba Al-Arabi and Unionaire factories in Egypt in December 2012 in order to verify the fulfilment of the value-added requirements. However, this visit has not taken place until the date of issuing this report, with no clear reason. The Sudanese Government s behaviour might therefore affect its credibility - not only with the GoE, but with Egyptian companies as well. Despite these issues, Egypt maintains a strong trade surplus with Sudan, valued at nearly USD280 million in 2014, down from USD545 million in Significant projects have been undertaken by the GoE to boost trade with Sudan, such as the opening of the Qostul-Ashkeet land port between the Sudanese and Egyptian borders in April This project is expected to facilitate trucking and freight services between the two countries. Sudan also represents a strategic investment destination for Egyptian companies, most significantly in agriculture as it benefits from abundant areas of arable land and water resources Egyptian Trade with Sudan (in USD) Exports - Sudan Improts Source: Ministry of Trade, Industry and SMEs 13

14 6. CONCLUSION This report outlines Egypt s trade relations with Africa. The GoE has shown persistent actions to support and enhance economic, political and cultural integration in the continent. This has been demonstrated through a series of bilateral and multilateral free trade agreements, technical and industrial support, as well as hosting the RIA to promote investment opportunities in the COMESA. In June 2015, the Tripartite Free Trade Agreement was signed at a high-level conference in Sharm el Sheikh, symbolising Egypt s effective return to the African community after its membership was suspended from the African Union in In November 2015, a regional trade and investment conference will also be hosted in Sharm el Sheikh to boost Egyptian-African economic ties. In terms of trade, there is a clearly observable trend, as Egypt maintains a trade surplus with most African economies that has been steadily decreasing since the 2011 revolution. Even with South Africa, which has a higher GDP per capita and relatively more advanced economy, Egypt still enjoys a trade surplus. However, the aggressive decline of exports to Africa is alarming, although it is a general phenomenon that infected most of Egypt s exporting industries. This phenomenon is due to a number of reasons, most notably the political instability that plague the country for a few years, which resulted in energy cuts - among other consequences. Most recently since 2014, another issue appeared over the Export Subsidy Programme (see N Gage Consulting s comprehensive report) as the Federation of Egyptian Industries formally requested that the GoE raises the amount dedicated to supporting Egyptian exports to counter the decline of exports. This request is however unlikely to be accepted, despite contradicting reports by the MITS in July In addition, Africa has abundant investment opportunities for Egyptian companies, namely in the energy, logistics and fast moving consumer goods sectors. Several companies are already seizing those opportunities, with much room for further investments. Specifically, investments in the logistics sector are considered to be the most lucrative opportunities as African countries still have some of the highest transportation costs in the world due to poor infrastructure, which reflects negatively on trade. Moving forward, the GoE will need to intensify its efforts to build on the existing free trade agreements in order to materialise their role and boost Egyptian exports to Africa. The African Investment Conference which is expected to be held in Sharm el Sheikh next November is expected a practical first step in the right direction. In light of the GoE s efforts on this issue, N Gage Debates will be hosting the Tripartite Free Trade Agreement Trade and Investment Workshop in Cairo on October 13th, This event will host an array of experts in the fields of African trade and investment, such as Dr. Sherif Mahmoud - Egypt s Chief Negotiator for the Tripartite Free Trade Agreement - who will share exclusive insights on the negotiations and the future of the TFTA. The workshop will be held under Chatham House Rules, so as to allow our speakers to have a comfortable and open discussion. To view the event s agenda, kindly visit our website at or us at debates@ngageconsulting.com. 14