The turmoil in Egypt could have contagion effects which would affect South Africa. “There could be a number of direct and indirect impacts,” said economics consultancy Econometrix senior economist Tony Twine told Engineering News Online on Wednesday.

Egypt is Africa’s number two economy, after South Africa, with an estimated gross domestic product (GDP) in purchasing power parity terms (PPP) of $500,9-billion last year, ranking the country as the 26th biggest in the world – right behind South Africa which is 25th, with an estimated 2010 PPP GDP of $527,5-billion.

Its economic growth rate was estimated at 5,3% for last year, in comparison to South Africa’s 3%. In 2009, the composition of Egypt’s GDP was estimated at 13,5% agriculture, 37,9% industry and 48,6% services (the make up of South Africa’s GDP that same year was estimated at 3% agriculture, 31,2% industry and 65,8% services).

Egypt is also Africa’s number two country in terms of population, after Nigeria, with just over 80-million people (Nigeria has a little more than 152-million people).

(All these figures are from online edition of The World Factbook 2011 of the US Central Intelligence Agency.)

“The entire North African experience at the moment – Tunisia and Egypt combined, with unrest possibly spreading to other countries – is, I think, rattling people’s confidence in emerging markets in general and African emerging markets in particular,” avers Twine. “There could be contagion effects on South Africa. The confidence required for capital flows could be shaken.”

The Egyptian government had to cancel planned sales of some $600-millions’ worth treasury bills over the first weekend of the crisis.

“That kind of thing makes markets nervous,” remarks Twine. “Add Ivory Coast’s unrelated default on a sovereign debt interest payment this week (also the result of a political crisis) and Africa’s image could be damaged.”

On the other hand, if the Suez canal had to be temporarily closed, South Africa would benefit, if only for a few weeks.

“About 7,5% of world trade moves through the Suez canal, mainly trade between Europe and the Atlantic area and the Far East,” points out Twine. “If that starts coming past the Cape, there could be a sizable increase in demand for South African harbour facilities, bunkering and chandlering services. This would be picked up in the services account of the current account of the balance of payments, where such items are recorded, by international convention. This would boost our service exports but might require increased imports, such as bunker oil, to meet the rise in demand.”