Exclusive | Post-Apple negotiations: Experts outlines challenges in Egypt's mobile industry

Updated 5/14/2024 10:19:00 AM
Exclusive | Post-Apple negotiations: Experts outlines challenges in Egypt's mobile industry

Arab Finance: The mobile industry in Egypt is facing a number of challenges, especially with the government announcing its negotiations with Apple to establish a factory in Egypt, Communications and information technology experts revealed.

Experts stressed that Egypt has infrastructure and information technology, as well as skilled and trained workers, which could qualify it to draw in international investments in this industry.

For his part, Amr Mahfouz, former Head of the Information Technology Industry Development Authority (ITIDA), outlined to Arab Finance some of the challenges facing the mobile industry in Egypt, most notably the tax exemptions and facilities granted to companies, as well as the amendment of some laws that hinder attracting foreign investments in Egypt.

He added that Egypt needs to offer more incentives to investors, especially when compared with the competitor countries within this field. These countries, such as Saudi Arabia, the UAE, and Morocco, provide investors with incentives and exemptions to facilitate investments on their lands. Not to mention, the countries that surpassed Egypt by making a great progress in the field of communications and information technology like China, India, Malaysia, and Vietnam.

Facilitating investment procedures

Mahfouz also asserted the necessity of facilitating investment procedures in Egypt, as well as maximizing the local production and reducing imported raw materials, targeting achieving local component of more than 70% in the mobile industry in Egypt.

The electronics industry currently receives great government attention, he pointed out, adding the country boasts significant programs in the field of programming, such as the Egypt Makes Electronics (EME) initiative.

He also demanded that this industry and such goals related to attracting international companies like Apple in the electronics industry to be achieved in coordination with several ministries, including the Ministry of Communications, Finance and Higher Education, the General Authority for Investment and Free Zones (GAFI), and others.

This notably encourages investors to invest in Egypt, given the various competitors in this field from other countries.

Additionally, ITIDA’s former head explained that many international mobile phone manufacturing brands, such as China’s Vivo, Nokia, and Oppo, are currently operating in Egypt, noting that the country imports mobile phones worth $1.5 billion annually.

This amount of cash shall be reduced to enhance local production and leverage the country’s foreign reserves, he pointed out.

Mahfouz concluded his statements to Arab Finance by saying: “Egypt needs a comprehensive plan to attract foreign investments and promote drawing more in the field of electronics, especially since Egypt has trained and skilled workers in this field.”

Attracting investment opportunities

As for the Chairman of SICO Electronics Co., Egypt's first smartphone manufacturer, Mohamed Salem, he said that Egypt is capable of hosting Apple factories as it possesses the required infrastructure and technological means that will help it do so.

Commenting on the current negotiations between the Egyptian government and Apple to launch the latter’s factories in Egypt, Salem highlighted that hosting Apple factories in the country provides many benefits, not only in providing direct and indirect job opportunities but also in helping in transferring technology and exporting it.

The presence of a global company like Apple in Egypt is a great opportunity to attract more investments and promote other economic sectors, he added.

Prime Minister Mostafa Madbouly recently stated that the Egyptian government aims to have factories for the five major mobile phone companies, namely Samsung, Oppo, Xiaomi, and Vivo, referring to ongoing efforts to persuade Apple to invest in the country.

With these global factories, the Egyptian state seeks to achieve the largest volume of production to cover the local market and expand exports, while offering numerous jobs, Madbouly said.

He also pointed out that Egypt aims for mobile phone exports exceeding $145 billion by 2030. This would promote local production and encourage manufacturers to keep up with the latest technology.

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