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How delays at Sudan’s largest port may truly increase commerce with Egypt

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Jan 18, 2021

CAIRO — The monthslong suspension of Port Sudan, the primary port in Sudan, has been dangerous information for Sudanese producers and importers. But it may additionally expedite a brand new type of cooperation between Egypt and Sudan.

In a press launch issued Jan. 12, Kampal Ali Kampal, chairman of the Chamber of Food Industries in Sudan, deplored the frequent disruption of cranes and loading tools at Port Sudan.

He stated that this frequent disruption led to the buildup of products on the port for greater than 4 months, which broken a few of the items and led the exporters to incur further charges for protecting the products on the port. Over the previous 4 months alone, he famous, the full losses incurred by the meals industries sector amounted to about $10 million.

Faraj Abdel Fattah, a professor of economics on the University of Cairo, advised Al-Monitor that not solely do the damages ensuing from the stalled Sudanese export and import commerce negatively have an effect on the state’s sources and the financial system normally, in addition they “adversely affect the lives of Sudanese citizens who are going through critical political circumstance amid recurrent protests against poverty and poor living conditions.”

“When Sudan imports goods [and they are kept at the port], some of these goods get damaged. As a result, goods are not always available [in Sudanese markets], and the huge fees paid to store the goods at the port for several months are affecting product prices. Meanwhile, foreign companies importing Sudanese goods are refusing to pay such fees on behalf of Sudanese exporters, who also incur delay penalties as a result of the goods not arriving on time, and this might eventually lead some exporters to bankruptcy,” he added.

In this regard, Abdel Fattah stated that activating transit commerce agreements between Egypt and Sudan could possibly be a fast answer for Sudan to guard itself from financial and business isolation and to guard Sudanese exporters from chapter and safe the Sudanese individuals’s wants of imported items.

On Dec. 27, 2020, Egyptian Minister of Finance Mohamed Maait introduced in an official assertion that the joint conferences held between officers of the Egyptian Ministry of Finance and Sudanese businessmen on the headquarters of the Egyptian Customs Authority in Cairo had concluded an settlement to permit Sudanese exporters and importers to obtain imports and exports by way of Egyptian ports, offered imports are transported from Egypt to Sudan and exports from Sudan to Egypt by land. This is what Maait dubbed as “transit trade.”

Maait added that preparations are underway at Egyptian ports to obtain Sudanese exports and imports and needs to be prepared inside just a few weeks. He additionally indicated that the Sudanese exporters have expressed willingness to switch 90% of the Sudanese maritime commerce visitors to the Egyptian ports that can be working as a part of the brand new settlement.

An knowledgeable supply on the Ministry of Finance advised Al-Monitor on situation of anonymity that the preparation of the ports in coordination with the Ministry of Transport and Communications, which is liable for the port sector, is happening rapidly.

Asked in regards to the anticipated advantages of the transit settlement between Egypt and Sudan, he stated that Egypt is to acquire customs duties in return for items getting into its ports in addition to charges for loading and unloading items to and from the docks of the ports of Ain Sokhna and Suez.

He famous that the entry of Sudanese exports and imports into Egypt might create a brand new supply of revenue for the delivery corporations that may deal with the switch of imports and exports between the ports of Ain Sokhna and Suez on the one hand, and the land ports of Qustul and Arqin, positioned on the border between Egypt and Sudan, on the opposite.

The transit settlement will revive providers on the land routes connecting the 2 international locations, he added.

The Commercial Representation Authority of the Egyptian Ministry of Trade and Industry held Jan. 9 a gathering with the Egyptian facet within the Egyptian-Sudanese Business Council, which is a federation made up of representatives of the chambers of commerce and business of the 2 international locations. 

The assembly mentioned the obstacles going through commerce between Egypt and Sudan, together with the transit commerce. One of the conclusions of the conferences was that the street between Egypt and Sudan needs to be improved and providers elevated to make sure the revival of commerce and the preservation of transit commerce.

Despite the 2 sides’ curiosity within the business transit settlement between Egypt and Sudan, Wael al-Nahhas, an financial knowledgeable and monetary adviser to various funding establishments, advised Al-Monitor that whereas he encourages the settlement out of Egypt’s must assist the Sudanese, he doesn’t anticipate the settlement to have a big financial or customs return for Egypt as a result of the amount of Sudanese commerce with the world is proscribed.

He additionally dominated out that the settlement would contribute to reviving Sudanese commerce “because Sudanese manufacturers, exporters and importers and the Sudanese government itself are grappling with a set of economic crises, hence the recession that cannot be solved by using alternative ports only.”

According to the World Bank, the amount of commerce change between Sudan and different international locations in 2017 amounted to about $14.5 billion, with $10.276 billion in imports and $4.240 billion in exports.

Kampala voiced one other opinion. He advised Al-Monitor that the dimensions of the Sudanese worldwide commerce is barely modest because of the Port Sudan disruption, which “caused exporters and importers in the Sudanese private sector alone about 100 million euros [about $121.25 million] in losses due to port fees and delay penalties. If this amount is invested in import, manufacture and export, the Sudanese trade will flourish and Egypt will benefit therefrom through customs duties, especially with the lifting of US sanctions on Sudan.”

Asked in regards to the significance of the transit commerce between Egypt and Sudan, Rashad Abdo, head of the Egyptian Center For Economic Studies, advised Al-Monitor that apart from its financial significance, such a commerce is of main political and strategic significance, because it boosts the alliance between Egypt and Sudan and encourages Sudan to converge positions with Egypt in regional crises such because the Grand Ethiopian Renaissance Dam disaster.

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