In 2022, the Egyptian state earned approximately $7.98 billion from the Suez Canal, marking yet another record-breaking year in terms of revenue for this vital pathway for worldwide maritime commerce.
The Suez Canal Authority, which oversees the Suez Canal, has reported that the canal’s 2022 revenues have increased by 25% compared to the previous year, resulting in the highest turnover ever achieved by this critical global shipping route. The canal, which was first opened in 1869, saw a record-breaking 1.41 billion tonnes of diverse cargo transiting through it, while 24,820 ships utilized it, averaging 68 ships per day, up from 56 in 2021, according to the Suez Canal Authority.
President Abdel Fattah al-Sisi’s major project to expand the Suez Canal has absorbed a significant portion of Egyptian finances in recent years, but has led to an increase in traffic through the canal. The project involved the digging of a new section in 2014 and 2015, which has made it easier for convoys to cross and reduced transit times for ships. As a result of the expansion works, the canal’s revenues have increased from 4 to 7.5 billion euros, according to Abdel Fattah al-Sisi.
Tax increase
Moreover, Egypt raises taxes and other levies on ships passing through the canal every year, which constitute one of the primary sources of foreign currency for the country. Egypt is ranked among the five nations most vulnerable to default on their external debt, according to Moody’s agency.
Amid inflation officially standing at 22% but estimated to be as high as 101% by hyperinflation experts, Egypt is on the hunt for the dollar. The country has received a $3 billion loan from the IMF over four years, but it must still repay $42 billion of its debt in 2022-2023.
In the beginning of January, a vessel transporting corn from Ukraine ran aground in the waterway that links the Mediterranean and Red Seas, but it was swiftly freed without causing any interruption to the navigation flow.
In 2021, a significant event occurred in the Suez Canal when the “Ever Given,” a colossal container ship weighing almost 200,000 tons, caused a blockage in the critical trade route between Europe and Asia for several days. The ship remained stuck for six days, and unfortunately, a member of the Suez Canal Authority lost their life during the rescue mission. The closure resulted in losses of $12 to $15 million per day for Egypt, while insurers estimated daily losses worth billions of dollars for global maritime trade.