Egypt is home to a robust and innovative ICT sector, with growth outpacing broader economic expansion. In FY 2018/19 the industry grew by 16% to reach LE93bn – one of the fastest rates of expansion across all economic sectors – while overall GDP growth was 5.6%. This trend was expected to continue, with the government forecasting in December 2020 that the sector would grow by 15.2% in FY 2019/20 to comprise 4.4% of GDP and bring in LE108bn in revenue. The industry’s strong performance stands in contrast to that of many other sectors – notably tourism, which was significantly impacted by the pandemic-induced lockdowns. ICT sector growth is forecast to reach 16% in FY 2020/21.
Expansion in 2020 was largely attributable to the fact that ICT was key for firms looking to address the challenges brought on by the health crisis. Indeed, the sector experienced a significant boom in demand, which has contributed to Egypt’s broader digital transformation. The government has long prioritised ICT development. To this end, in mid-2020 the Ministry of Communications and Information Technology (MCIT) launched Digital Egypt, a comprehensive plan to shift towards a more digital society and encourage innovation. The plan is based on digital transformation, as well as digital skills and jobs. “The project includes digitalising all government activities and services. As of July 2021, 75 public services have been digitalised and are being offered nationwide, with plans to reach 170 by the end of 2021,” Amr Talaat, the minister of communications and information technology, told OBG.
The ministry aims to transform the country into a leader in innovation through targeted investment, capacity-building and training programmes, the adoption of e-government services and infrastructure improvements. In doing so, the Digital Egypt plan will promote digital inclusion and boost competitiveness.
The country is working to develop specialised segments such as electronics design and manufacturing, IT outsourcing (ITO) and business process outsourcing (BPO), as well as encourage new start-ups. The MCIT’s Digital Egypt plan seeks to provide all government entities with fibreoptic cable connections; as of September 2020, 5300 government buildings had been connected to the fibre-optic network. Once completed, the programme will connect around 32,000 buildings at an estimated cost of LE6bn. “The pandemic has been an unprecedented opportunity to encourage the uptake of digitalised services,” Talaat told OBG. “As of mid-2021 more than 1.3m citizens had registered for and accessed government services online.” Included in the ICT 2030 Strategy is the creation of several technology parks for a total investment of LE1bn. Importantly, these facilities will be spread across the country with an eye to boosting digital inclusion outside the capital, where much of Egypt’s investment and innovative activity is heavily concentrated. In mid-2020 Talaat told local media that six technology parks would be completed by the end of that year in Minya, Menoufiya, Mansoura, Sohag, Qena and Aswan. The parks will include training facilities, hardware design labs, incubators, and shared workspace to support innovation and entrepreneurship.
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