Suez Canal revenues, a key source of hard currency for the Egyptian government, declined by 62.6% in the first 11 months of 2024 compared with the same period in 2023, according to a recent IMF report.
In absolute terms, Egypt lost approximately $6 billion in revenue during that timeframe.
The downturn is mainly attributed to disruptions in Red Sea shipping routes that began in December 2023 following attacks on civilian vessels by Houthi rebels from Yemen.
By May 2024, transit volume through the canal had dropped to roughly one third of pre-conflict levels, prompting many ship operators to reroute via the Cape of Good Hope despite the higher costs and longer delivery times.
The sharp decline in canal income has placed significant pressure on Egypt’s fiscal position.
In the 2023/2024 fiscal year, tax revenues tied to the canal more than halved in the second half, which contributed to a 0.6% reduction in GDP.
Weighing in on this fall, the IMF projects that revenues will shrink further, falling from $6.6 billion in FY 2023/2024 to approximately $3.6 billion in FY 2024/2025.
Data from the Associated Press indicates that transits decreased from over 26,000 ships in 2023 to around 13,200 in 2024.
Attacks on commercial vessels in the southern Red Sea by Houthi forces began in late November 2023, targeting ships with links to Israel and prompting several large shipping companies—such as Maersk, MSC, CMA CGM and COSCO—to reroute vessels via the Cape of Good Hope. The increased voyage distance led to elevated insurance premiums, fuel costs, and transit times—typically adding ten days or more per journey. This situation directly contributed to the drop in canal traffic and revenues seen in 2024.
International Monetary Fund (IMF) is an international financial institution, headquartered in Washington, D.C., owned by 190+ member countries, that aims to maintain global economic stability and provide financial assistance and policy advice.
Suez Canal Authority (SCA) is a statutory body of the Egyptian government responsible for the operation and management of the Suez Canal. Chaired since 2019 by Osama Rabie, the SCA administers transit fees and navigational services.