During a March 2015 investment conference in the Red Sea resort town of Sharm el-Sheikh, Egypt’s government leaned on its powerful Arab sponsors for financial support. But a key sideshow was the strong turn out by a who's who of Sub-Saharan African heads of state, high ranking ministers and officials. The message Egyptian officials were keen to push was that an investment in Egypt is, once again, also an investment in Africa.
Egypt ramped up political missions across the continent after President Abdel Fattah Al-Sisi came to power following the 2013 ouster of divisive elected Islamist leader Mohammed Morsi. The flurry of diplomatic visits included foreign minister Sameh Shoukry's trip to Sudan in August 2013, and stretched into far-flung locales such as Burundi and Senegal.
According to a senior Cairo-based diplomat attending the investment conference, these visits were focused on bolstering support for Egypt's Nile water ambitions as Ethiopia moves towards completion of the Grand Renaissance Dam. The project has been a long-standing source of friction between the two neighbors, with desert-bound Egypt fearful of losing control of its water security. The diplomatic efforts now appear to be succeeding: President Al-Sisi signed a deal on water with Ethiopia and Sudan in Khartoum on 23 March.
"This idea of Egypt refacing Africa is not new, it has happened on and off at different points, but the Nile is an important step towards reintegration. I think after [the agreement] we will see a lot more progress on water sharing and, hopefully, therefore economic agreements," the senior diplomat said, speaking on condition of anonymity because they were not authorised to speak publicly on the issue.
Egypt’s desire to reinforce its African ties makes sense in the context of North Africa’s struggles to recover from the after-effects of the 2011 Arab spring revolutions, which left Egypt’s economy in tatters. The country’s GDP has hovered around 2 percent since 2011, according to the World Bank. Neighboring Libya has descended into sectarian warfare.
The region is also contending with the rise of violent groups including Islamic State across the Arab world. Most recently, a terrorist attack targeting tourists in Tunis, Tunisia’s capital, has cast a pall over the region’s most stable post-revolution recovery.
Sub-Saharan Africa, meanwhile, has keen investors scrambling to find projects in the region’s fast-growing economies - many of which are averaging growth in the double digits.
Federation of Egyptian Chambers of Commerce (FEDCOC) director general Alaa Ezz says the renewed political relations - on show during the Sharm el-Sheikh conference - are driving Egypt's economic journey south. Moreover, he says it is a sign that two years of diplomatic sweet-talking is working as Egypt seeks again to influence African politics.
The presence of the African delegations “is a message that relations between each country is growing. They had no vested interests in [the conference in] Sharm el-Sheikh,” he toldThis Is Africa.
“Egypt is the one trying to bind them together. Egypt is trying to reprise the role in Africa that it had under Nasser.”
There are also historical roots to Egypt’s relations with more southern African nations. Gamal Abdel Nasser, Egypt’s second post-independence president, saw Egypt as an African as well as an Arab state. He put considerable effort into spreading the country's influence in both geographic spheres during the 1950s and 1960s .
Mr Nasser was a prominent proponent of pan-Africanism and was the second president and a founding member of the Organization of African Unity (OAU), the African Union’s predecessor.
But that influence in Africa withered from the 1970s onwards as Egypt became more focused on Arab issues. When Ethiopia began building the Grand Renaissance Dam over the Blue Nile in 2011, Egypt was left with little political, cultural or economic clout in the region to counter the project.
That lack of regional sway culminated in early 2013 when a live television broadcast showed several senior Egyptian politicians suggesting bombing and sabotage as methods to stop Ethiopia’s dam construction.
The subsequent charm offensive initiated by the Sisi administration has tried to counter the effects of past diplomatic false steps such as this. The government’s new soft power approach includes focusing visits on investment and trade, such as foreign minister Shoukry's January trip to Nairobi that involved setting up a new Egypt-Kenya business council.
However while the Sisi administration seems keen to nurture these growing ties, economically Egypt has yet to recover from its long absence from sub-Saharan markets.
According to IMF statistics, in 2013 non-North African countries did not even make it into Egypt's top 40 export partner rankings. In the same year, Egypt imported more by value from New Zealand and war-torn Syria than its largest sub-Saharan trade partner, Kenya. Government figures show that Egypt's exports and imports to Africa's non-Arab states have been falling since 2011 and 2012 respectively.
Building trade ties
Nevertheless, there are early signs that Egypt's new approach is beginning to bear economic fruit.
Over the last year, the country has ramped up its efforts to join or lead sub-saharan African trade groups such as the Common Market for Eastern and Southern Africa (COMESA), launched trade talks with Kenya and Ethiopia, and announced it would hold a 2015 summit between three major African trade blocs.
FEDCOC data shows trade with Ethiopia has risen almost 85 percent in the last nine months, and has doubled year-on-year with Kenya. In late February, the African Export-Import Bank announced a $500m programme to support trade between Egypt and the rest of Africa.
Mr Ezz confirmed that Egypt is also preparing to sign a new trade agreement with Ethiopia before the end of March, and will join the 26-member Tripartite Free Trade Area (TFTA) encompassing three African regional blocs which is due to launch in June.
But for all the importance Egypt is pinning on its role in the TFTA process, University of Geneva professor Jaime de Melo says sheer distance means it is unlikely to benefit much from the inclusion of major economies such as South Africa, or the smaller, less developed ones such as Somalia.
“These countries are very disparate. They have very different interests... If you have a resource rich and a resource poor country, they have different interests," he tellsThis Is Africa. "I do not think there will be much economic integration. Not because this is not worth doing, but its going to lead to as much as has been announced.”
Infrastructure is a similarly big problem.
"The level of exports from Egypt to Africa is remarkably low, but infrastructure is a major challenge," the Egyptian diplomat says. "Physically getting exports out of [Egypt] to Africa is not easy."
Weak banking systems are also a major hindrance, as few countries' letters of credit are accepted internationally and diplomatic issues such as sanctions on Sudan restrict trade.
Despite challenges, these an issue Egyptian businessmen are working around. Mr Ezz says FEDCOC is encouraging trading companies to barter by setting up warehouses for Egyptian products where they can be sold using local currency, and buying local products to sell back home.
Egypt's economic summit was as much a pitch for cash as a stage for Sisi's government and African states to show that the country is pivoting back towards the rest continent. Proponents on both sides hope this new relationship will bring renewed trade and economic benefits as well as political linkages.
This article was originally published by This Is Africa, a sister publication to fDi (www.thisisafricaonline.com)