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Cairo: The Gulf
The report of the Egyptian Council of Ministers showed that Egypt’s digital exports achieved a significant leap, reaching US$6.2 billion in 2023, an increase of 26.5% from US$4.9 billion in 2022.
The report shows that the added value of Egypt’s information technology industry will reach 275.5 billion pounds in 2023, compared with about 209.5 billion pounds in 2022, with a growth rate of 31.5%.
The report, prepared by Dr. Osama El-Gohary, Assistant to the Prime Minister and Director of the Information and Decision Support Center of the Council of Ministers, and submitted to Prime Minister Dr. Mostafa Madbouly, titled “Outsourcing Industry in Egypt,” states that the growth rate of Egypt’s outsourcing services industry in 2022-2023 will reach 54.2%, and the added value of the industry will be approximately US$3.7 billion, compared with approximately US$2.4 billion in 2021-2022.
He noted that the Egyptian government’s goal is to reach $9 billion in outsourced service exports by 2026.
The report pointed out that the investment value allocated to the communications and information technology sector in the 2023-2024 fiscal year plan reached 83.3 billion pounds, while the investment value in the 2023-2022 fiscal year was about 56 billion pounds, an increase of 48.8%, of which private sector investment exceeded about 52.3 billion pounds, accounting for 63% of the total, while public investment was 31 billion pounds, accounting for 37% of the total.
The report states that the number of outsourcing service centers in Egypt will reach 199 in the period 2022-2023, compared to 160 in 2020-2021, an increase of 24.4%. In addition, the number of companies operating in Egypt has also increased. The outsourcing services sector will register about 185 companies by 2022-2023, compared to 148 companies in 2020-2021, an increase of 25%.
- Growth of the outsourcing industry
The report added that the Egyptian government is interested in promoting the development of the outsourcing industry and training human resources, and since November 2022, Egypt has signed 74 agreements with international and local companies to expand the establishment of 85 outsourcing centers and appoint 60,000 experts.
He said that within three years, more than 20 companies have invested in Egypt for the first time, while others have expanded their operations in Egypt, as 12 of the largest companies in the global outsourcing industry have outsourcing centers outside Cairo.
The report confirms that the number of experts in the outsourcing industry will reach 336,000 by 2026, increasing the number of independent professionals by 30%, compared to the global level of around 15%, thereby increasing their number from 80,000 to 220,000 in 2022 to 220,000 in 2026.
The report confirmed that the sector includes outsourcing services to companies in the fields of human resources services, call centers, software export development and technical support, embedded systems and electronic design, and electronic circuit design, and stressed that Egypt is one of the best destinations for outsourcing services and cross-border information technology services across the border.
He stressed that Egypt has been able to attract many international companies to set up branches in Egypt thanks to its digital capabilities.
The report added that ITIDA, in cooperation with the German Outsourcing Association, launched the guide “Egypt as a Destination for Outsourcing Services”, which includes the capabilities Egypt possesses in the field, as well as the competitive advantages Egypt enjoys.
- Legal and regulatory mechanisms
The report states that Egypt has established clear legal and regulatory mechanisms. Create a favorable outsourcing environment, aiming to protect service providers and their customers, and adopt a number of measures; Support the IT industry and facilitate procedures, the most prominent of which are the Intellectual Property Law, the Labor Law, the Communications Management Law, the Investment Law, the Law on Combating IT Crimes, the Law on Personal Data Protection and the Restructuring of the Supreme Council for Digital Society. The report explains that Egypt’s outsourcing industry is one of the key industries and a fundamental pillar of the strategy of the Ministry of Communications and Information Technology, which aims to expand foreign markets and develop the industry in a systematic and organized manner. To increase digital exports, global competition and support the digital transformation process.
He pointed out that Egypt is preparing to become the next major business destination and global hub for outsourcing services through the Digital Egypt Strategy for the Outsourcing Industry 2022-2026, which aims to attract major international companies engaged in the industry to invest in Egypt, develop Egypt’s digital exports and provide jobs for the country’s digital economy.
Egypt’s strategy is based on three main objectives: They are: to triple Egypt’s digital export revenues at a compound annual growth rate of 19% between 2022 and 2026 and to create additional and sustainable jobs in the outsourcing industry focused on high value-added services.
The strategy aims to create 215,000 jobs in the outsourcing sector and build a well-known brand for Egypt in emerging digital services and technologies in the fields of artificial intelligence and advanced analytical data.
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