Egypt’s economy may soon be feeling the pinch from the security situation in the Red Sea, which has dramatically reduced traffic through the Suez Canal.
The waterway is a vital, reliable source of income, and it has increased in importance since the recent two-lane expansion program boosted transit capacity. In 2022-23 – with tanker traffic soaring due to the war in Ukraine – transit fees approached $9 billion, accounting for about two percent of Egypt’s GDP. Egypt’s government uses these dollars to service its $165 billion in public debt (among other purposes).
However, the attacks that Yemen’s Houthi rebels have launched on international shipping have reduced canal traffic radically, and revenue with it. Almost all large container ships are now re-routing around the Cape of Good Hope because of the security threat, along with an increasing percentage of bulker and…
