Egypt says Suez Canal revenues down 40-50% amid Red Sea tensions

Egypt says Suez Canal revenues down 40-50% amid Red Sea tensions

Egyptian President Abdel-Fattah Al-Sisi said yesterday that Suez Canal revenues have dropped 40-50 per cent amid tensions in the Red Sea, Anadolu news agency reported.

“The Suez Canal contributes about $10 billion annually to Egypt, but its revenues dropped 40-50 per cent,” Al-Sisi said at the opening of the annual Egypt Energy Show in Cairo.

Transits through the international waterway were affected by tensions in the Red Sea amid Houthi attacks on Israeli-linked commercial ships and US retaliatory air strikes.

According to the UN Conference on Trade and Development, weekly transits through the canal dropped an estimated 42 per cent over the last two months.

Al-Sisi said Egypt faces major challenges resulting from the conflicts in the Gaza Strip, Libya, Sudan and the Russia-Ukraine crisis.

“All this is going on while the Egyptian government is committed to fulfilling its obligations with petroleum companies, development partners and financial institutions,” he added.

The head of the Suez Canal Authority, Osama Rabie, has recently said that revenues had declined from $804 million recorded in January last year to $428 million during the same month this year, a drop of 46 per cent.

The canal’s revenues constitute one of the most prominent sources of foreign exchange revenues for Egypt.

In the fiscal year 2022-2023, the channel generated $9.4 billion in revenues, the highest annual revenue recorded, an increase of about 35 per cent compared to the previous year, according to the canal’s authority.

The decline in waterway revenues coincides with Egypt experiencing one of the worst economic crises in its history, after the annual inflation rate reached a record level, driven by the decline in the local currency value, the shortage of foreign currency and the importation of a majority of foodstuff.

Cairo’s external debt has more than tripled over the last decade, reaching $164.7 billion.