Egypt poised to accelerate e-commerce growth with new national strategy

20 March 2017

Egypt should leverage the strengths of its ICT sector – including its skilled workforce and competitiveness as a regional centre for business process outsourcing - to position itself for strong e-commerce growth

Egypt is committed to leveraging e-commerce and the digital economy as a powerful catalyst for innovation, growth, trade and social prosperity. To position itself for strong e-commerce growth, Egypt should build on the strengths of its ICT sector, skilled workforce and competitiveness as a regional centre for business process outsourcing. E-commerce offers an opportunity for Egypt to boost exports, create jobs and innovation and inclusive development.

These are some of the messages of the new national e-commerce strategy developed by the United Nations Conference on Trade and Development (UNCTAD) in cooperation with Egypt’s Ministry for Communications and Information Technology (MCIT).

The strategy was presented to His Excellency, Eng Yasser ElKady, Minister of Communications and Information Technology, on 7 March 2017 in Cairo.

"The strategy is a solid foundation for stimulating e-commerce in Egypt, and I'm looking forward to the strategy's execution," said HE Minister ElKady at the high-level meeting. "I really appreciate all the efforts and dedication by UNCTAD on this strategy," he added.

"We had a fruitful cooperation and collaboration in working together on the national e-commerce strategy, in sharing knowledge, analyzing findings and learning from each other," said Dr. Nagwa El-Shenawi, Under-Secretary for Information and Strategic Planning at Egypt's Ministry of Communications and Information Technology.

From Left: Under-Secretary Nagwa El-Shenawi, Torbjorn Fredriksson, HE Minister Yasser El-Kady, Marie Sicat
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Through the strategy, the Government of Egypt set goals of raising the current level of e-commerce contribution to GDP and to doubling the number of its businesses currently selling online by 2020.

UNCTAD’s National E-commerce Strategy for Egypt outlines seven sub-strategies, some 30 recommendations aimed to strengthen Egypt’s performance in key policy areas, and six megaprojects. The new strategy report is supplemented by an action plan to support the implementation of the strategy.

UNCTAD produced the strategy in response to a request from the Government of Egypt. Its development benefited from partnership with the World Bank on e-payments, as well as substantive contributions from the International Labour Organization, Universal Postal Union, International Trade Centre, the United Nations Educational, Scientific and Cultural Organization, Organisation for Economic Co-operation and Development (OECD) and European Commission. The Head of Rural Taobao of the Chinese e-commerce giant, Alibaba, served as advisor on rural e-commerce development.

Drawing from a large, skilled talent pool in IT and engineering, Egypt can play a central role in helping to enhance the use of ICT in more sectors, develop software that can meet the needs of Egyptian businesses including micro and small enterprises, and strengthen sectors such as retail, financial services, logistics and insurance, that offer significant potential for expanding activities online.

With a consumer market of over 90 million people (around 60% of whom are younger than 30 years old and increasingly technology savvy), Egypt has an internet penetration of 38% - one of the largest populations of prospective online shoppers in the Arab-speaking world.

But e-commerce has been slow to take hold in Egypt, due to several barriers and challenges, including an urban-rural digital divide and socio-cultural preferences for cash over alternative payments. There is a need to roll out higher-speed broadband necessary to deliver digital services, enhance the availability of e-commerce platforms and e-marketplaces, and to strengthen the domestic logistics sector, including in rural and remote areas.

Data show that currently only 2.2% of internet users in Egypt shop online. Few Egyptian enterprises current sell online, primarily 17% of large firms and 3% of small firms. Only one in ten handicraft MSEs use the Internet; much fewer sell their products online. Although among internet users 30% of rural consumers had bought a product online in 2016, the e-commerce potential of Egypt’s rural market has not been tapped.

The strategy outlines strategic recommendations to tackle challenges and bottlenecks identified through a diagnostic of Egypt’s e-commerce landscape on the basis of an integrated framework of policy areas of strategic importance to e-commerce development. The strategy covers ICT infrastructure and telecom services; logistics and trade facilitation; legal and regulatory environment; electronic payments; skills development and building talent; and e-procurement.

Nearly 70 interviews of key stakeholders – including key high-level government officials - were conducted, as well as consultations with approximately 100 stakeholders. Several surveys and focus groups of entrepreneurs also fed into the diagnostic and strategy development. This included the Egypt’s first official national survey of its microenterprises, a new survey on e-commerce use by households and individuals, as well as an UNCTAD/World Bank e-commerce survey on payments and banking services.

At the meeting, HE Minister ElKady indicated plans for presenting the e-commerce strategy to the ICT community and main industry players at a launch event in Cairo.

The full national e-commerce strategy, including other strategic measures identified by UNCTAD to help galvanize e-commerce, will be presented internationally during the UNCTAD E-Commerce Week in Geneva, Switzerland, in the presence of HE Minister Yasser ElKady.

UNCTAD is mandated to promote trade in developing countries, and serves as a focal point within the United Nations on issues of science, technology and innovation for development. In this context, it assists countries in reaping greater development gains from ICTs through trade. UNCTAD’s ICT Policy Review Programme provides technical assistance, advisory services, diagnostics and strategy development, including action plan design, on e-commerce and ICT national planning at the request of governments.