High hopes for Egypt’s IT sector

Published November 14th, 2000 - 02:00 GMT

The Egyptian government is building great expectations from its local Information Technology (IT) industry, as communications minister, Ahmed Nazif, announced that the first purpose-built IT business park, or “smart village”, would be built in the Cairo suburb of Giza.  


Egypt plans to build hi-tech “villages” to try to become a regional technology hub and extend its long-standing pre-eminence in the Arabic media to the Internet. A second is planned in Mansoura, north of Cairo, and a third in the Mediterranean port of Alexandria.  


President Hosni Mubarak has allocated government land for the Giza project and given smart villages a 10-year tax break, while the private sector will contribute $26 million for the project’s development. Facilities will include business-oriented hotels, a convention center, restaurants and financial services.  


A visit by Mubarak to the United States earlier this year helped seal alliances with IT firms such as Microsoft, IBM and Cisco in upgrading Egypt's IT education. The agreements aim to train 5,000 professionals a year to develop IT in Egypt and compete in international markets. Minister Nazif estimated the value added by each professional to about $100,000, which means half a billion dollars added to GDP every year.  


Nazif further said Egypt had seen heavy investments in IT the past 12 months. The US electronic chip-making giant, Intel, won government approval last month for a $500 million project to build a microchip plant that would create 3,000 jobs. 


Earlier this year, the Egyptian Prime Minister, Uteif Obeid, signed an agreement with the CEO of Microsoft EMEA (Europe, the Middle East and Africa), Michel Lakoumb. This agreement, planned for three years and costing $350 million, is aimed at promoting the local IT sector, especially through training. 


Egypt's IT industry is relatively small but growing fast. A report by the Economist Intelligence Unit in September said there are only one million computers in Egypt, 62 Internet service providers and 400,000 Internet users, representing 0.6 percent of the population. The number of personal computers sold annually in Egypt has been estimated at 200,000. Year-on-year growth in Egypt's IT market as a whole, including services such as consultancy, maintenance, application development and customization, is about 40 percent. 


The current governmental plan aims at increasing the number of subscribers to 2 million, as well as spreading computer service to reach all 26 governorates. This move, according to a report by Xinhua News Agency, is hoped to raise this industry’s revenues to $500 million in the upcoming three years. — (Albawaba-MEBG)

© 2000 Mena Report (www.menareport.com)

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