Tunisia–Egypt Trade Pact

Big Rhetoric, Small Numbers

Tunisia’s recent call for a “model partnership” with Egypt has been positioned as a flagship step for North African economic integration. Prime Minister Sara Zaâfrani Zenzeri’s announcement, made at the Tunis–Cairo Economic Forum, promised a direct maritime line, trade fairs, and closer investment ties under the umbrellas of AfCFTA and COMESA. The language is ambitious, but the numbers tell a more sobering story. In 2024, Egypt exported approximately US$434.5 million worth of goods to Tunisia — an increase of about 15.4% from 2023. Tunisian exports to Egypt, by contrast, were just under US$50 million in 2024. Together, their bilateral goods trade remains below US$0.5 billion, less than 0.2% of either country’s GDP. Even if flows doubled, they would remain marginal compared with Morocco–Egypt or Kenya–Uganda trade, which already exceed US$1 billion annually.

A central plank of the partnership is the proposal to establish a new maritime line between Tunisian and Egyptian ports. On paper, this could reduce costs and cut transit times. In practice, there are already bi-weekly container services running seven to ten days between Alexandria and Tunis. Unless the new line guarantees weekly frequency, shorter port dwell times, transparent tariffs, and anchor shippers to underwrite demand, it risks being more symbolic than transformative. Investors will watch for contracts awarded to Alexandria Container & Cargo Handling (ALCN.CA) and Alexandria Shipyard (unlisted), which would be natural beneficiaries if trade volumes rise.

The macroeconomic backdrop adds further headwinds. Egypt’s Suez Canal revenue plunged in 2024 to about US$3.99 billion, down from approximately US$10.25 billion in 2023, a decline of nearly 60%. The Suez Canal Authority’s performance has knock-on effects for listed Egyptian transport firms such as Egyptian Transport & Commercial Services (ETRS.CA) and Alexandria Port Services (MARS.CA). For investors, these figures raise questions not only about the canal’s cash flows but also about Egypt’s sovereign credit spreads, already under pressure from FX liquidity shortages.

Tunisia’s trade picture also reflects structural weakness. Imports in 2024 reached roughly US$26.6 billion, with a widening trade deficit. Core sectors such as textiles, once a mainstay for Tunisian exports, remain vulnerable to European demand cycles. On the Tunis Stock Exchange, companies like Société Tunisienne des Industries du Textile (SOTU.TN) and Société Magasin Général (MG.TN) are directly exposed to import-driven cost pressures and demand volatility.

Yet the opportunity is real if reforms align. Agri-food could see rapid growth if cold-chain logistics are strengthened, with possible upside for Juhayna Food Industries (JUFO.CA) in Egypt and Société Frigorifique et Brasserie de Tunis (SFBT.TN) in Tunisia. Manufacturing value chains, especially in electrical components, could benefit firms such as El Sewedy Electric (SWDY.CA), which already has pan-African operations, and Tunisia’s Société Tunisienne de l’Electricité et du Gaz (STEG, unlisted) through power-infrastructure linkages. Services — from tourism to professional mobility — could lift earnings for Orascom Development Egypt (ORHD.CA) and Société des Loisirs Touristiques de Tunisie (SLTT.TN) if mobility and payments are eased.

The missing link is a credible financial architecture. Without export credit guarantees, blended facilities, and parametric insurance for Red Sea disruptions, smaller exporters will remain excluded. Financial institutions such as Commercial International Bank (COMI.CA) in Egypt and Banque de Tunisie (BT.TN) in Tunisia could play catalytic roles if provided with trade-finance risk-sharing from Afreximbank or multilaterals. Sovereign bondholders will also track whether bilateral trade easing reduces external financing gaps, given Egypt’s outstanding Eurobonds (EGYPT 7.625% 2032) and Tunisia’s strained sovereign spreads.

Ultimately, the success of this partnership depends on execution. Without measurable quarterly metrics on clearance times, sailing frequency, and SME participation, the initiative risks remaining at the level of summits and communiqués. With trade volumes so small, success will be determined less by political announcements and more by the granular work of customs integration, shipping economics, and financial risk-sharing. If Tunis and Cairo deliver, listed companies in logistics, agrifood, and manufacturing could see upside. If not, investors will write off the partnership as another case of African economic rhetoric outpacing reality.

Key Tickers to Watch

Notes: Market caps reflect latest local-currency snapshots on indices as of 11 - 12 of September 2025. "Ratios may use trailing financials with reporting lags."