Alexandria is transitioning to become Egypt’s new economic hub. It’s a good move by Egypt’s policymakers because it’s vital that revenue generators are found to replace those currently in place from what will become the diminishing use of the Suez Canal. The search for new transport routes on global waters by several superpowers is growing.
Cairo understands that logistics will always play a crucial role in its growth and as a center for the flow of goods in and out of the country. Internal and external transport network projects are already being pursued.
Egypt signed a deal with Siemens in January that will see the German engineering giant build a $23 billion high-speed electric railway network connecting the Red Sea coastal city of Ain Sokhna with New Alamein on the Mediterranean Sea. It’s due for completion in two years.
Then there is a 1,000 km highway under construction to connect Egypt to Chad through Libya at an estimated cost of $1.4 billion.
But, the jewel in the crown of this transport strategy is the Cape Town-Alexandria highway project. The scale is huge cutting through nine countries in addition to Egypt, and connecting the North of the continent to the bottom. It will become part of pan-Africa’s infrastructure.
It’s understandable that Egypt is driving the highway’s construction because this route will become a major asset to boost Egypt’s GDP.
With a projected cost of $1.65 billion, from Alexandria the 10,000 km road will pass through Sudan, South Sudan, Ethiopia, Kenya, Tanzania, Zambia, Zimbabwe and Botswana before its final destination of Cape Town in South Africa.
Given the number of countries involved, and with unstable situations in some, and tensions between others, the plans aren’t without problems.
The anxieties present in Egypt and Sudan about Ethiopia’s Renaissance Dam is one major hurdle to overcome, where operational impediments might hinder the passage of the road through the country.
If the construction of the Dam continues and relations between the two states escalate towards boycott or military action it puts the road project in jeopardy. No alternative route bypassing Ethiopia has been proposed.
With funding coming from the African Development Bank, and assistance from the UN Economic Commission for Africa and the African Union, there is a clear commitment from all stakeholders to make the project a success.
The speed with which Egypt can transport goods to the countries on the route will quicken, but there is another bonus. On the back of the completion of the highway, arterial roads from other countries will link onto this main thoroughfare, offering Egypt opportunities to feed into other African markets.
The plans for the highway have been on the backburner for almost a decade, with funding the major hindrance to progress. Reports suggest that Cairo is now keen to see the project completed in 2024.
Egypt has yearned to revive itself as a MENA powerhouse. The transport infrastructure plans it has introduced will return the country to its former glory, somewhat.
But, it isn’t simply about vanity: the transport policies also reflect the government’s awareness of the necessity to grow its economy through trade with partners that already exist close by.
What to trade though?
As mentioned, the Suez Canal is a key source of revenue, with tourism also. It isn’t rich in many industries compared to other countries that export minerals and heavy machinery and component instruments for example. Also, produce from the agricultural sector can’t be supplied for export in huge supply.
It’s possible that China’s Belt and Road Initiative can tap into the Alexandria-Cape Town highway. This can channel all manner of Chinese goods around Africa, and from Alexandria across the Mediterranean Sea into Europe. Likewise, European countries will look at the highway as an accessible gateway to Africa that will supersede many maritime routes.
How much revenue this will generate for Egypt isn’t clear, but it will no doubt be significant.
International trade is one of the most important features of today’s globalized world. It drives it.
Egypt has been at the crux of this with the Suez Canal acting as a conduit for trade to happen easily, but it is futile to believe that the canal will retain its logistics position for the circumnavigation of the flow of goods.
The Suez Canal will always contribute into Egypt’s GDP, but not as much as the Alexandria-Cape Town highway will when it comes online.