Interview: Carlo Calenda
How attractive is Egypt for Italian companies looking to enter domestic and regional markets?
CARLO CALENDA: Egypt could serve as an ideal centre for Italian companies eager to tap into the potential of the East Africa region, given its geographical proximity to a number of African and Middle Eastern countries and the network of free trade agreements it has concluded with them. In June 2015 the leaders of 26 African countries – representing 48% of the African Union membership, more than half the continent’s GDP and 57% of its population – signed a highly significant agreement to establish the Tripartite Free Trade Area, which aims to unify Africa’s three existing trade blocks by the year 2017.
This agreement signifies the realisation of a century-old dream to link the continent from the Cape to Cairo. It will boost intra-African trade, which currently makes up just 12% of the value of Africa’s exports, by removing barriers on most goods, making them cheaper and stimulating $1trn worth of economic activity across a region of more than 630m people.
It will also be beneficial for non-African countries, facilitating business and exports through the creation of a harmonised trade regime, which should eliminate the multiple differences currently existing among neighbouring African States, and the overlapping or contrasting sets of regulations that impair or deter both trade and investment.
If the agreement (which is at present mainly focused on trade) is ratified by each country’s parliament, implemented in a reasonable timeframe and supported by sufficient political will to see it through, negotiations on other sectors will ensue. If the vision to integrate Africa’s economies becomes a reality, new horizons will open up for a continent that has seen average growth rates of 5% in recent years.
Egypt, with its long history and role as regional leader, will be at the core of this ongoing process, and Italy intends to both support and benefit from it.
What sectors are prime for additional involvement by Italian companies?
CALENDA: We can certainly play a major role in oil and gas, renewable energy and infrastructure. During Prime Minister Mahlab’s visit to Rome in July 2015, several Italian companies signed important agreements with their Egyptian counterparts. Others are currently engaged in negotiations for projects launched at the conference in Sharm, where the Egyptian government announced commitments worth billions of dollars aimed at fast-tracking the development of three main areas: the area surrounding the Suez Canal, the north-west coast and the country’s south-eastern region, also known as the “Golden Triangle”, which is extremely rich in phosphates.
In August 2015, the Italian energy firm Eni discovered a massive offshore natural gas field at its Zohr prospect in the Egyptian sector of the Mediterranean Sea. This discovery will greatly alter the Egyptian energy equation: Zohr potentially holds 30trn cu feet of gas – it is likely to be the largest natural gas field in the Mediterranean, and possibly one of the largest in the world. Once operational, it will play a major role in satisfying Egypt’s energy demands for decades and will boost Eni’s activities in the country considerably.
In your opinion, which sectors hold potential for increased trading activity?
CALENDA: I see many trade opportunities in different fields besides oil and gas (historically the most important sector for us), renewable energy and infrastructure. Logistics and mechanics, for example, have a lot of potential; machinery already accounts for one-third of our exports to Egypt.
Italy’s companies have the skills, the traditions and the flexibility to reach the highest possible levels of customisation, and this allows us to provide a unique contribution to Egypt’s ambitions to modernise its industries and to improve its agro-industrial sector.
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