CAIRO: Egypt reported an increase in Suez Canal revenues in April, reaching $374.9 million, which according to the canal authority spokesman is an indicator of a global economic recovery.
“The canal is a good indicator of how the world economy is doing, not just the Egyptian economy,” Tarek Hassanein, a spokesman for SCA, told Daily News Egypt.
“Economies doing better means an increase in freight and an increase in freight means and increase in revenues for us,” he added.
April’s figures were up 8.1 percent from $346.9 million last year, but showed a 1.2 percent drop from March, a state website showed on Sunday.
Suez Canal revenues, tourism and remittances from Egyptians living abroad are the country’s top sources of foreign currency, along with oil and gas exports.
According to senior economist Nada Massoud from the Egyptian Center for Economic Studies, foreign currency generated by the canal, and by other sources, is vital to Egypt’s economy in terms of imports, food security and financial security.
“The government uses foreign currency income to pay for its imports, most important of which is wheat, which plays a vital part in the countries food security. Foreign currency reserves have a role in decreasing the vulnerability of the Egyptian currency in times of crisis as it acts as a buffer against fluctuations of currency,” Massoud said.
Massoud stressed the importance of maintaining an inflow of foreign currency and keeping adequate foreign currency reserves. “It is a lesson we have learned from the 1997 financial crisis in Asia,” Massoud added.
The canal authority left its transit tolls for 2010 unchanged. The number of oil and non-vessels reached 259 and 1195 vessels in April, compared to 309 and 1,207 in March.
The monthly statistics indicated that the same number of flags, 62, represented the Suez Canal traffic this month, topped by Panama, Liberia and Hong Kong, with a 25.6 percent increase in cargo traffic.
According to Hassanein, the revenues brought in by the canal in the fist months of 2010 improved compared to the previous year. The revenue in January was LE 383.6 million in 2010 compared to LE 332.4 million in 2009, in February it was LE 334.1 million compared to LE 301.8 million and in March it was LE 379.4 million compared to LE 327 million.
Hassanein also attributed the rise in revenues to improved security. “The problems with the Somali pirates have receded, due to better patrolling of the Gulf of Aden and conveys protecting ships entering the Red Sea,” said Hassanein.
The canal, completed by French engineers in 1869, was built so ships could avoid the lengthy trip around Africa and pass directly from the Mediterranean to the Red Sea. At the height of piracy problems, however, many companies preferred to make the longer trip around Africa for safety reasons, which put a dent in canal revenues.
