Experts forecast that Egypt’s export proceeds may decline by 25% over 2020 as the outflow of Egyptian goods face internal and external delays.
This will also weigh on the country’s external accounts, according to an American Chamber of Commerce in Egypt (AmCham) report “Impacts of COVID-19 on Egypt’s Economy”.
Egypt’s top foreign trading partners are the European Union (EU), the US, Italy, Spain, China, Turkey, the UAE and Saudi Arabia. These economies have been some of the worst hit by the global coronavirus (COVID-19) pandemic.
The AmCham report noted that the US remains Egypt’s top export market, followed by Germany and Spain. Similarly, Egypt is likely to import lower volumes, as overseas suppliers focus on domestic markets.
This will affect Egypt-based manufacturers, especially in the electrical appliance, electronic devices and textiles sectors that rely heavily on imported production inputs.
The report said the government is sterilising all educational facilities, and the public school system’s Thanaweya Amma exams and its middle school equivalent are expected to proceed as scheduled. These will take place in sterilised test rooms, with all those attending, whether students or exam invigilators, required to wear face masks and other protective equipment. Final exams for primary and preparatory school grades have been cancelled.
The Ministry of Planning and Economic Development has also announced a 104% increase in public investments for the higher education sector in fiscal year (FY) 2020/21. The funds will be directed towards university expansions, and automating and equipping university hospitals with better tools.
AmCham further noted that occupancy rates at hotels have accordingly plummeted, and new bookings over the fourth quarter (Q4) of 2020 have retracted by 80%. According to Minister of Antiquities and Tourism, Khaled El-Anany, the lockdown could result in monthly losses to the tourism industry of $1bn, and even more if hospitality is also taken into account.
“The pandemic has led to a decline in global demand for energy despite the decrease in both oil and natural gas prices,” the report said, adding, “In FY 2018/19, Egypt’s petroleum imports were at $12.1bn when oil prices were in the range of $60 per barrel.”
The report also said that, if oil prices remain depressed over the coming period, standing at $25.17 per barrel at time of publishing, the import bill will likely decline by half.
“Due to measures taken to limit the spread of COVID-19, an increasing number of people are home and online for work, school and social activities throughout the day,” the report said. “This has created an overload on ICT services and exposed the need to develop the infrastructural capacity.“