Egypt as a global outsourcing hub

Doaa A. Moneim, Monday 12 Dec 2022

Egypt is branding itself as the next big global hub for digital and high-end services.



Egypt’s Information Technology Industry Development Agency (ITIDA) signed a set of outsourcing and offshoring agreements with 29 leading global companies on Wednesday.

They include deals with 21 companies that are expanding their presence in Egypt including IBM, Amazon, Microsoft, and Majid Al-Futtaim, and another eight that are tapping the market for the first time.

The latter comprise the French multinational Capgemini, Germany-based Evolvice, the multinational Nortal that operates in the US, Europe, the Middle East, and Africa, the UK-based PWC, the second-largest professional services network in the world, the India-based Tech Mahindra, and the UK-based Trimetis.

Speaking to Al-Ahram Weekly, former CEO of ITIDA Amr Mahfouz said that such agreements showed the strength of the IT sector in Egypt and its attraction for new investments to enter the market.

“ITIDA continues to invest in building the digital and soft skills of our large talent pool, with a strategic focus on developing the country’s capabilities in high-value services, including engineering, research and development, embedded software, and electronic design,” he said.

Mahfouz expects the deals to be a significant contributor in helping the ITIDA to achieve the goals of the Digital Strategy for the Offshoring Industry that it launched in February and aims to multiply export revenues and create high-value job opportunities in the four years to 2026.

“Egypt is a key growth market for Tech Mahindra in the MENA [Middle East and North Africa] region; therefore, the launch of our technology centre in Cairo marks an exciting milestone for us,” Senior Vice President and head of Middle East and Africa at Tech Mahindra Ram Ramachandran told the Weekly.

He pointed out that his company aims to further strengthen its presence in Egypt with the addition of 1,000 employees within the next three years. “We plan to support our Egyptian and global clients who want to operate in Egypt with a wide range of services and technological capabilities,” Ramachandran added.

IBM Egypt General Manager Marwa Abbas said that the company’s recent agreement with ITIDA reconfirms its commitment to the Egyptian ICT industry by expanding its services from Egypt to the rest of the world, as well as creating sustainable employment opportunities for young people by attracting investments to the sector.

During the signing ceremony for the agreements, Minister of Communications and Information Technology Amr Talaat said that they are expected to create over 34,000 jobs and generate $1 billion in digital exports annually. “These agreements reflect Egypt’s conducive business environment and multinationals’ confidence in our qualified local talent,” Talaat added.

He underlined the local market’s potential as the next big hub for digital and high-end services, thanks to the efforts made to boost Egypt’s competitiveness in the offshoring industry.

Globally, the outsourcing industry amounts to $320 billion annually, while the MENA region’s share is only $5 billion, according to the Ministry of Communications and Information Technology.

Egypt’s ICT sector has been marked as the fastest-growing sector in the Egyptian economy since 2017. In the current 2022-23 financial year, ICT sector investments are projected to grow by 15 per cent to reach LE67.1 billion, up from LE58.2 billion expected by the end of the 2022-21 financial year that ended at the end of June.

“With its unique central location at the crossroads between three continents, Egypt delivers a resilient and high-quality digital infrastructure and provides a supportive legislative framework catching up with global rapid growth. Our plentiful supply of tech talent is all set and ready at a very competitive cost, with proven experience in business services delivery for global firms to more than 100 countries in 20 different languages,” Talaat said.

Alaa Al-Khishen, an expert in the IT sector and the outsourcing industry and CEO of the multinational French outsourcing company Webhelp and former vice chairman of the Egyptian IT, Electronics and Software Alliance (EITESAL), told the Weekly that the outsourcing and offshoring industries in Egypt have witnessed a significant boom over the past few years, paving the way for more foreign investments to enter the local market.

“The agreements that have been recently inked will reflect positively on the Egyptian economy amid the ongoing global economic challenges. Through such partnerships, the economy will earn more hard currency in addition to creating job opportunities,” Al-Khishen said.

He called on the organisations concerned to launch a campaign to create greater awareness about the potential of Egypt as a regional hub for the outsourcing and offshoring industries.

*A version of this article appears in print in the 8 December, 2022 edition of Al-Ahram Weekly.

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