Connecting Egypt

 29th May 2022

The German Company Siemens sealed an €8.7 billion deal to develop the railway system in Egypt. A total of 2000 km of railway lines will be constructed connecting 60 cities by train, providing rail access to around 90% of the population according to siemens. The contract includes, besides the rail lines, 41 high-speed trains, 94 regional trains, 41 freight trains, and eight depots and freight stations. This project aims to make Egypt the Sixth Largest Railway Network. This is the biggest order in the company’s 175 year history.

Causes:  The current Rail network in Egypt connects the cities in the northern part and some cities in the eastern and central part i.e. a very less part of the country has been connected via rail network till now. Thus, Egypt has came up with this project to connect the unconnected parts of the country.

Effects: Egypt will have the most modern high-speed rail network in the world after the completion of this project. This project will create job opportunities in Egypt. According to Siemens, 40,000 jobs will be created along with 6700 jobs in connected industries. Also the fully electrical railway will lower CO2 emissions by 70%. Thus a boost in the economy of Egypt is expected in the coming few years.

What this means for you: Expect an increase in the exports of petroleum and cotton from Egypt as the logistics will soon get developed. Money which was spent may get refilled in the national treasury via increased taxes and interest rates, thus expecting deflation in the Egyptian economy. Thus due to a reduction in the money available to the public, there might be a food crisis in an upcoming couple of years.

The Seimens stocks should be expected to grow as there are funds now available to give to the shareholders.

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