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East African economies are looking to benefit from increased trade with the rest of the world following the extension of the 146-year-old Suez Canal in Egypt.
The regional bloc has been receiving growing volumes of cargo — from 3.28 million tonnes in 2004 to 4.36 million tonnes in 2014 —through the canal.
Official data from the Suez Canal Authority shows that the highest volumes were in 2006 (5.12 million tonnes) and 2008 (5.91 million tonnes).
This cargo originates from countries in Europe, the UK, America, through the Black Sea, the Baltic Sea and the Mediterranean.
The volume of cargo from the EAC to these countries through the canal however declined by 617 per cent from 14.83 million tonnes to 2.06 million tonnes in the same period.
Products passing through the canal include petroleum and related products such as crude oil, gasoline, gas oil and diesel oil, fuel oils and liquefied petroleum gas (LPG).
Other goods are cereals, fertiliser, fabricated metals, chemicals, coal and coke, foodstuffs, machinery and parts, ores and metals, oil seeds and vegetable oils.
From January to June, the volume of cargo passing through the canal to East Africa increased 80 per cent to 458,000 tonnes from 254, 000 tonnes.
On June 10, Cairo hosted 26 heads of state representing the Common Market for Eastern and Southern Africa (Comesa), the EAC and the Southern African Development Community (Sadc) at the official launch of the Tripartite Free Trade Area (TFTA).
The TFTA is expected to increase trade in an expanded market with a population of 625 million people.
“With the expansion of the canal we expect to see the development of more transshipment ports,” Peter Kiguta, EAC Director General in-charge of Trade and Customs told The EastAfrican.
The extension of the 200km canal, perceived as the heartbeat of the Egyptian economy, was carried out in 12 months from August 6, 2014 at a cost of $8.5 billion.
The canal links the Mediterranean Sea and the Red Sea, allowing ships to travel between Europe and India via the shortest route (7,000km).
It separates the African continent from Asia and provides the shortest maritime route between Europe and the lands lying around the Indian and western Pacific Oceans.
Revenues from the expanded canal are expected to more than double by 2023 to $13.2 billion, up from $5.3 billion.
It will also allow two-way traffic and reduce transit time for ships by seven hours.
“The new Suez Canal has served as a demonstration of the tireless efforts and commitment of the Egyptian people,” said Admiral Mohab Mameesh, chairman of the Suez Canal Authority.
The new Suez Canal was officially inaugurated on August 6 by Egyptian President Abdel Fattah Al-Sisi.
The overall length of the New Suez Canal is 72km.
Source: The East African
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.
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The construction of the additional capacity on the Suez Canal was done in a record time. It was great fanfare seeing the opening ceremony for the new canal extensions held on the 6th of this month and one could imagine how it was when it was first inaugurated in 1869 after completion of its construction that was led by De Lesseps the French Engineer
This article sates that ” The volume of cargo from the EAC
to these countries through the canal however declined by 617 per cent
from 14.83 million tonnes to 2.06 million tonnes in the same period”
From records available on port traffic in all East African ports, It was not possible at any time in the past that East African originating cargo ( exports plus transshipment ) had reached that level of 14.83 million tonnes.
You may wish to confirm this from both KPA and TPA.