Egypt commits to accelerated digitalization

Burdened by an economy that is reliant on vulnerable sectors (Suez Canal, tourism, textiles, hydrocarbons and agriculture), a poorly qualified workforce and an inefficient bureaucracy, Egypt currently has one of the highest inflation rates in the world.

With a mobile phone penetration rate of around 95% (over 100 million subscriptions) and an Internet penetration rate of 49%, Egypt is Africa’s ICT (Information and Communication Technology) giant. As part of its “Vision 2030” strategy, the government has adopted a proactive stance by introducing a new component entitled “Digital Egypt”.

Launched in 2020 under the aegis of ICT Minister Amr Talaat, this new digital doctrine is based on three pillars: improving digital infrastructures, the regulatory environment, and building innovation capabilities. The government and Telecom Egypt (an 80% state-owned company with a virtual monopoly on the distribution of fixed telephony and broadband Internet) have allocated nearly 17 billion Egyptian pounds (around €502 million) to capacity building.

As a result, Internet speeds have quadrupled in less than a year, rising from 6.63 MB/s in February 2019 to 27.09 MB/s in February 2020. At the same time – in August 2020 – the Egyptian government launched an e-services portal offering almost a hundred different services, ranging from making appointments online (at different government offices) and renewing or requesting official documents, to making online payments.

However, a number of challenges are hampering the implementation of “Digital Egypt”. Making a radical digital transition is difficult in a society in which the illiteracy rate stands at over 25%, the informal sector accounts for almost 60% of employment, national infrastructure is inadequate, and the investment climate is unfavorable.

A “fake” digital transition?

In reality, this sudden digitalization of Egypt’s various administrative and ministerial services is more about automating existing services and administrative procedures than embarking on a genuine digital transition. Although efforts have been made to modernize and embrace technological advances, the bureaucratic structure is complicating the effective implementation of digital initiatives.