The Suez Canal has never generated so much revenue

The Suez Canal brought in around €8.6 billion to the Egyptian state in the 2022-2023 fiscal year, a new record for this crucial route for global maritime trade located in eastern Egypt.

This represents a “35% increase” compared to the 6.4 billion euros registered the previous year (July-June), the president of the Suez Canal Authority (SCA), Osama Rabie, said at a press conference on Wednesday.

This increase is explained by an increase in traffic thanks to a new section excavated in 2014 and 2015, which now facilitates the crossing of convoys and reduces transit time for ships.

The development is the first of Egyptian President Abdel Fattah al-Sisi’s “megaprojects” that have consumed much of the country’s finances in recent years.

10% of world trade

Egypt increases every year the taxes and other crossing fees imposed on ships using this route that connects the Red Sea and the Mediterranean Sea and through which about 10% of world maritime trade passes.

In March 2021, the Ever Given, a giant container ship whose bow had become embedded in the eastern bank of the canal, blocked the traffic route between Europe and Asia for several days. The rescue operation had lasted six days and insurers had estimated the losses to world maritime trade at several billion dollars a day from the impact.

The Suez Canal is a valuable source of foreign exchange for Egypt, which is going through a serious economic crisis. According to the Moody’s agency, the country is one of the five with the highest risk of defaulting on its external debt.

Cairo obtained its fourth loan from the International Monetary Fund (IMF) in December since 2017, but the three billion dollars that will be paid in approximately four years weigh little, the only debt service for 2022-2023 amounts to $42 billion . In exchange for this financial aid, the country devalued its currency by almost 50%.

While rumors of further devaluation abound, last week President Sisi seemed to be against it. “We are flexible with the exchange rate, but if it threatens national security and harms the interests of the Egyptians, we cannot remain passive,” he said.