Egypt ICT Covid-19 Recovery Roadmap
Interview: Amr Talaat
Minister of Communications and Information Technology
On how has Egypt addressed the impacts of Covid-19, including the surge in demand for ICT services
Report: How is Egypt’s digital transformation agenda playing out in light of Covid-19?
While the Covid-19 pandemic severely impacted economies around the world as hospitals reached capacity, business activity slowed, and restrictions were placed on the movement of people and goods...
Economic Foundations
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Pre-Covid-19 Overview
The Egyptian economy has steadily expanded in recent years on the back of extensive reforms aimed at correcting macroeconomic imbalances, attracting investment and reducing the fiscal deficit.
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Coordinated Reform Programme
The Egyptian economy has steadily expanded in recent years on the back of extensive reforms aimed at correcting macroeconomic imbalances, attracting investment and reducing the fiscal deficit.
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A More Agile System
The introduction of a flexible exchange rate in November 2016 was part of the loan agreement with the IMF. The international organisation had advocated for the move as a means of stabilising the economy and alleviating a shortage of US dollars – an acute concern for a country reliant on imports.
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Favourable Demographics
Several non-economic factors have supported growth and made Egypt more resilient to external shocks. First and foremost is the country’s growing population, which rose from 90.2m in FY 2015/16 to 101.5m in FY 2019/20.
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Covid-19 Timeline
Large public gatherings, including concerts, parties, celebrations, birthdays, exhibitions and festivals, as well as large religious ceremonies, are suspended until further notice
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Stringency of Response
The Oxford University Covid-19 Government Response Tracker is a composite measure based on nine response indicators including school closures, workplace closures and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the sub-national level, the index is shown as the response level of the strictest sub-region.
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Financial Measures
The government acted swiftly to implement financial measures to alleviate the economic effects of the pandemic. A LE100bn stimulus was announced in late March 2020, half of which went to the hard-hit tourism sector.
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Health Measures
The government moved quickly to implement containment and other health measures. The Ministry of Health (MoH) announced the first confirmed case of Covid-19 on February 14, 2020, and by March 19 all international flights were suspended and a curfew from 7.00pm to 6.00am was imposed.
Pre-Covid-19 Overview
Coordinated Reform Programme
A More Agile System
Favourable Demographics
Covid-19 Timeline
Stringency of Response
Financial Measures
Health Measures
Case Study
With the support of the Ministry of Communications and Information Technology, Egypt has prioritised digital transition and the wider adoption of technological tools to facilitate business. These efforts have created a supportive ecosystem for companies such as Cloud4Rain, an IT solutions firm focused on the digital transformation, cloud computing, cybersecurity and enterprise software.
Adaptability was a key component for business growth in 2020 given the general instability from changing circumstances during the year. However, adjustments have been more challenging for companies that operate with legacy hardware compared to those that use the cloud.
In light of this, Cloud4Rain focused on helping its client base move towards digital transformation. Rising demand for such services was highlighted by reports from the
Ministry of Communications and Information Technology showing that there was a 50% increase in data traffic through international gateways between the start of the pandemic in March 2020 and October 2020.
The Covid-19 pandemic brought many challenges, but it was also a catalyst for digital transformation as companies shifted to remote work and consumer outreach. Between April 2020 and June 2020 the country saw a 7.7% increase in internet penetration, with 7.6m additional users, according to figures from the Ministry of Communications and Information Technology.
While the ICT sector benefitted in the short term from a wider understanding of the critical role technology plays in business continuity and efficiency, its longer-term performance will depend on the availability of skilled talent to facilitate digital acceleration
Sector Mobilisation
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Introduction to the ICT Sector
Egypt is home to a robust and innovative ICT sector, with growth outpacing broader economic expansion.
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Telecommunications
At the onset of the Covid-19 pandemic, the initial shift to the digital sphere by most businesses caused a surge in demand for ICT services, and highlighted the need to expand both infrastructure and capacity further.
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Digital Transformation
Egypt has a large public workforce of roughly 5.6m people, and government operations are largely paper-based.
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Cloud Services
Public cloud services have emerged in recent years as core contributors to the ICT sector’s growth.
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Digital Workplace
Prior to the pandemic, the widespread adoption of remote work was relatively novel, especially in a country where business transactions are largely carried out face to face.
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IT and Business Process Outsourcing
Egypt is becoming increasingly popular as a destination for ITO and BPO given its advantageous location between Europe, the Middle East and Africa; its young, educated and multi-lingual population; and strong IT infrastructure.
Viewpoint
Viewpoint: Ahmed Refky, CEO, RAYA Contact Center
The inevitable reality of the Covid-19 pandemic is that some sectors and verticals have been declining while others are flourishing unexpectedly. In the customer-facing sphere, those experiencing brisk growth tend to have an expansive digital presence.
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Cybersecurity
The crisis highlights the urgency of cybersecurity. A 2020 report by IT security firm Trend Micro found a 16% year-on-year rise in vulnerabilities in industrial control systems in the first half of 2020.
Introduction to the ICT Sector
Telecommunications
Digital Transformation
Cloud Services
Digital Workplace
IT and Business Process Outsourcing
Viewpoint: Ahmed Refky, CEO, RAYA Contact Center
Cybersecurity
Future Transformation
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Turning Point
Egypt’s partial lockdown resulted in a surge in demand for telecoms services as business and social interactions moved online.
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Digital Egypt
Developing the digital economy and strengthening Egypt’s ICT infrastructure are central to efforts by the Ministry of Communications and Information Technology (MCIT).
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Infrastructure and 5G
5G is a key component of the MCIT’s strategy to encourage technological innovation and sustainable development, and both the government and private telecoms providers have invested in necessary upgrades.
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Smart Cities
Egypt plans to build 50 fourth-generation cities – or smart cities – by 2050, with 22 under development as of late 2020.
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Automation and Industry 4.0
Egypt has well-diversified industries, and the cost and availability of labour have been competitive advantages for attracting investment.
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The Future of Outsourcing
IT outsourcing (ITO) and business process outsourcing (BPO) are competitive fields internationally, especially when countries compete for market share with wellestablished locales such as India and the Philippines.
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From Cash to Digital Payments
While blockchain is still in its infancy in Egypt, digital payments have gained traction in recent years as the authorities have worked to encourage financial inclusion and cashless transactions.
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Developing Tech Talent
Like many countries, Egypt is adapting to the changing needs of employers by working to prepare a large youth population for indemand jobs – many of which require at least a basic set of tech skills.
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Data Protection
The importance of strong cybersecurity measures became more evident as companies shifted operations online amid the pandemic.