A Brief Overview of the Bilateral Trade Relationship between Ethiopia &Arab Republic of Egypt

  • Full name: Arab Republic of Egypt
  • Population: 82.5 million (UN, 2011)
  • Capital: Cairo
  • Area: 1 million sq km (386,874 sq miles)
  • Major language: Arabic
  • Major religions: Islam, Christianity
  • Life expectancy: 72 years (men), 76 years (women) (UN)
  • Monetary unit: 1 Egyptian Pound = 100 piastres
  • Main exports: Petroleum, petroleum products and cotton
  • GNI per capita: US $2,600 (World Bank, 2011)

The following table indicates the Export, Import, Trade balance, Total Trade turn over and annual growth rate between Ethiopia & Egypt from 2004 up to 2011 GC.

The table indicates that the trade relationship between the two countries is significant though with fluctuating rate of growth.

Year / Export (USD) / Export
Growth Rate(%) / Import (USD) / Import
Growth
Rate(%) / Trade Balance (USD) / Total Trade Turn Over (USD) / Growth Rate of Total Trade Turn Over (%)
2004 / 2,533,423.09 / - / 34,879,902.94 / - / -32,346,479.85 / 37,413,326.03 / -
2005 / 15,895,515.98 / 527 / 49,468,681.75 / 42 / -33,573,165.77 / 65,364,197.73 / 75
2006 / 8,824,798.34 / -44 / 61,169,758.69 / 24 / -52,344,960.35 / 69,994,557.03 / 7
2007 / 7,291,933.02 / -17 / 88,808,825.58 / 45 / -81,516,892.56 / 96,100,758.60 / 37
2008 / 13,167,497.05 / 81 / 86,507,605.17 / -3 / -73,340,108.12 / 99,675,102.22 / 4
2009 / 14,411,050.84 / 9 / 62,804,326.25 / -27 / -48,393,275.41 / 77,215,377.09 / -23
2010 / 44,243,268.76 / 207 / 91,906,051.61 / 46 / -47,662,782.85 / 136,149,320.37 / 76
2011 / 45,449,613.13 / 3 / 76,193,675.92 / -17 / -30,744,062.79 / 121,643,289.05 / -11

The total trade turnover has increased from around 37 million US dollars in 2004 to 136million US dollarsin 2010 G.C showing a significantrate of growth while it declines in 2011.

  1. Export

According to the trade data, Ethiopia’s export to Egypt has been increasing from around 3million US dollarsin 2004 to 45million US dollarsin 2011showing asignificant rate of growth.
The following graph shows Ethiopia’s export to Egypt from 2004 up to 2011. The highest export was in 2011 amounting USD 45,449,613.13.

Since the Ethiopian Economy is an agrarian economy most of the exportable commodities are agricultural & semi processed commodities. Some of the major goods exported to Egypt includes:
  • sesamum
  • camels
  • ox
  • live bovine animals other than pure breading
  • Kidney Beans
Year / Major Export Products (Amount in USD)
Sesamum seeds / camels / Live bovine
Animals / Ox / Kidney Beans / Others
2004 / 1,777,857.51 / - / - / - / 82,021.12 / 673,544.46
2005 / 1,538,168.31 / - / 8,140,063.23 / - / 225,679.23 / 5,991,605.21
2006 / 84,577.91 / - / 4,690,047.58 / - / 27,479.95 / 5,408,788.11
2007 / 3,152,417.84 / - / - / - / 263,592.39 / 3,875,922.79
2008 / 3,349,725.44 / 4,477,883.92 / - / - / 987,462.09 / 4,352,425.60
2009 / 3,410,360.83 / 8,322,711.98 / - / 35,149.90 / 590,388.23 / 2,052,439.9
2010 / 3,289,837.72 / 27,454,833.64 / - / 9,686,024.02 / 186,894.08 / 3625,679.30
2011 / 2,736,751.64 / 21,801,246.21 / - / 14,271,966.51 / - / 6,639,648.77
Total / 19,339,697.20 / 62,056,675.75 / 12,830,110.81 / 23,993,120.43 / 2,363,517.09 / 31,233,978.93
  1. import
The major imported commodities from Egyptincludes the following:
  • other petroleum oils and oils obtained from bituminous min,
  • edible soya bean oil
  • edible palm oil
  • white Portland cement
  • electricity meters
  • other primary cells and primary batteries
  • Parts of Industrial Machinery for food & drink manufactures
  • Desktop Computers etc

Ethiopia’s import fromEgypthas been increasing from around 35million US dollars in 2004 to 76 million US dollars in 2011showing a rate of growth of54%. The highest import from Egypt was in 2010 amounting USD 91,906,051.61.
Ethiopia’s Import from Egypt Republic from 2004 up to 2011

It is also clear from the data that the balance of trade has remained to be in favor of Egypt because of our import is manufactured goods while the export is primary products.
Egypt investment in Ethiopia
Pre Implementation
56 projects with a capital of 1,356,062.00 ETBand create 2,621 permanent & 17,989 temporary employment opportunities.
Implementation
The Egyptian owned projects which are under implementation are 4 in number with a capital of 7,436,000 ETBand create 47 &78 permanent &temporary employment opportunities.
Operation
The Egyptian project under operation are 7with a capital of 38,474,000 ETB
Create 648 &1,450 permanent & temporary employment opportunities in the country. One can easily see that the overall Egyptian owned projects in Ethiopia are 67 with a capital of 1,391,973,000 ETBcapital 3,316 &19517 permanent & temporary employment opportunities.
In addition to this the Egyptian also invests in Ethiopia in partnership with Ethiopians, German, Saudi Arabia, Sudan & Yemen citizens.
RECCOMMENDATION
  • Since our exports to Egyptare agricultural commodities and mainly camel & ox, we have to keep the quality at higher level.
  • Given that more than 38% of our export to Egypt is camels, we need to diversify to other possible agricultural and semi-processed agricultural products for which we have a comparative advantage.
  • Encourage the Egypt business community to work in partnership with Ethiopian counter parts for mutual benefits in terms of cheap labor, technology transfer, and new market access.
  • Create sustainable relationship with the two countries’ business people through active affiliation of the Chambers of Commerce of the two countries through effective implementation of MoU.
  • Even though we have JBC agreement it is to be recalled that we had ha excellent working relations in the past. However, we have been unable to reach the secretariat in Cairo during the past one year. Therefore revitalizing and activation the council is instrumental in order to expedite business &investment relations for mutual benefit.