Egypt’s Minister of Planning and Economic Development participates in the round table entitled "The Role of Regional Value Chains and Their Importance in Promoting Trade and Investment Flows between Arab and African Countries"

H.E. Dr. Hala El-Said, Minister of Planning and Economic Development, who is also acting as the Governor of Egypt at the Islamic Development Bank Group (IsDB) participated on Monday in a round table entitled "The Role and Importance of Regional Value Chains in Enhancing Trade and Investment Flows between Arab and African Countries".
 The table was held on the sidelines of the third meeting of the Governance Council of the Arab-African Trade Bridges Program, which Egypt chairs for a year.
Dr. Hala El-Said, in response to a question about the importance of Arab-African cooperation in developing joint trade and investment and contributing to achieving sustainable development in the African and Arab regions, and the expected role of regional value chains to achieve this; to the exceptional circumstances, the world is going through in light of the spread of the Covid-19 virus and the resulting damage and losses on economic activities.El-Said added that the relative recovery from the crisis was accompanied by concerns about the impact of a rapid recovery in demand, which may not be matched by appropriate supply rates, and some have called it a possible disruption in supply chains, or an uneven or unbalanced recovery.
 This imbalance, along with the pressures resulting from the ongoing turmoil in the labor markets, has led to a rapid increase in the prices of some major and strategic commodities at the world level, perhaps the most important of which are freight services and energy prices. This inflationary wave was driven by high demand, lack of inputs, and supply chain disruptions, which is evident from the rising trend of the Supply Chain Disruption Index. This situation has become more difficult with the challenges and repercussions of the geopolitical crisis and political turmoil that the world is witnessing recently.El-Said said that the effects of these crises vary on the countries of the Arab and African regions, according to the degree of integration into the global economy, and the degree of their dependence on the supply chains associated with the crisis.
However, in general, there are negative repercussions of all these crises and expected losses on the economies of countries, as the African Development Bank estimated that the gross domestic product of the African continent will shrink by 0.7% in 2022, and inflation will increase by 2.2% in 2022 in light of the recent global geopolitical crisis between Russia and Ukraine.Dr. Hala El-Said also referred to the huge human material potentials possessed by the Arab and African regions, which are not reflected in the current indicators of intra-trade, which are still modest.El-Said stressed the importance of maximizing the benefit of this potential in strengthening regional value chains, developing trade and joint investment, and then achieving development in Arab and African countries, especially since there are material, contractual and institutional components that support this.The Minister of Planning and Economic Development continued that although the continent of Africa is rich in diverse natural resources, and has a wide market, consisting of about 1.3 billion people; if the Arab market is added to it, this number will approach 1.5 billion people. El-Said pointed out that African trade in goods and services is still low, as it represents about 3% of the average global exports and imports, and 6% of the total merchandise exports of developing countries. The average trade exchange rate between African countries is 15% of total African exports, and about 14% is the volume of intra-Arab trade, while in other blocs such as the ASEAN Group, the volume of intra-African trade reaches 25%.Dr. Hala El-Said indicated that the data of the World Trade Organization indicate that despite the slowdown in the conclusion of new regional trade agreements between countries, in 2020, the number of agreements concluded between countries in the regional framework reached about 300 trade agreements, which is a significant number.El-Said stressed that the serious economic reforms of the business environment are one of the elements that support regional value chains, which enhance the competitive position of African and Arab countries and create more opportunities to attract investment in partnership with the private sector. El-Said indicated that these reforms are reflected positively on both the economic and social aspects of the countries of the continent, as many African countries have been able to achieve economic growth rates that are among the highest in the world, despite the effects of Corona. Despite the contraction of foreign direct investment in Africa by 18% in 2020 compared to 2019 as a result of the pandemic (UNCTAD, 2020), financial flows represented 10% of the gross domestic product of the African continent, and the continent recorded the fastest growth in the world in foreign direct investment inflows by 11% (according to the African Development Bank).


El-Said pointed to the challenges and requirements to maximize the use of the available capabilities and ingredients to strengthen regional value chains and develop trade and inter-investment, which include the need to provide information.El-Said added that it is important to maximize the benefit from the comparative advantages that each country enjoys, which calls for reconsideration and taking into account those relative differences, including the size of the country, the available resources, and the current industrial base, in strategies to restructure the manufacturing sector and then create job opportunities and appropriate to country conditions.She also explained that it is important to provide financing, especially innovative methods of financing, such as green bonds and cooperation between sovereign funds, as well as looking towards developing modern banking systems that facilitate trade exchanges, such as expanding the scope of electronic payment systems.