Egypt's outsourcing sector: A golden opportunity

Egypt's outsourcing sector has experienced remarkable growth, solidifying its position as a global hub for digital and high-end services. The Information and Decision Support Center (IDSC) reported that the industry grew by an impressive 54.2% in FY2022/2023, reaching an added value of $3.7 billion, compared to $2.4 billion in FY2021/2022. This robust growth underscores Egypt's potential and attractiveness in the outsourcing market.

Expansion and investment in the outsourcing industry

The outsourcing sector's expansion is evident from the 24.4% increase in outsourcing service centers and the 25% rise in companies operating in the field during the same period. The Ministry of Communications and Information Technology has been instrumental in this growth, focusing on making Egypt a prime destination for outsourcing and cross-border IT services. The sector's added value amounted to EGP 275.5 billion in FY2022/2023, a significant increase from EGP 209.5 billion the previous year, marking a 31.5% growth rate.

Strategic initiatives and digital exports

The Egyptian government's strategic initiatives, particularly the Digital Egypt Strategy for Offshoring Industry, have been pivotal. Launched in February 2022, the strategy aims to triple Egypt’s digital export revenues by 2026, targeting a compound annual growth rate of 19%. Digital exports saw a substantial rise, reaching $6.2 billion in FY2022/2023, up from $4.9 billion in the previous fiscal year, reflecting a 26.5% increase.

These exports encompass a range of services, including human resources, call centers, software development, technical support, and electronic systems design. Investment in the communications and IT sector also surged, with EGP 83.3 billion invested in FY2022/2023, a 48.8% increase from the previous year's EGP 56 billion. Notably, the private sector contributed 63% of these investments.

Global partnerships and job creation

Egypt's strategic location, coupled with a skilled workforce, has attracted numerous international companies. The Information Technology Industry Development Agency (ITIDA) has signed agreements with 29 global firms, including tech giants like IBM, Amazon, Microsoft, and Capgemini. These partnerships aim to expand offshoring centers, establish new delivery hubs, and create substantial employment opportunities.

For instance, Tech Mahindra plans to bolster its presence in Egypt by adding 1,000 employees within three years, while IBM's recent agreement with ITIDA aims to enhance its services from Egypt to the global market, creating sustainable job opportunities. These initiatives are expected to generate over 34,000 jobs and bring in $1 billion in digital exports annually.

Future prospects and economic impact

The continuous efforts by the Egyptian government and ITIDA have positioned Egypt as a key player in the global outsourcing industry. The sector's growth is expected to contribute significantly to the economy, providing a much-needed boost amid global economic challenges. By capitalizing on its strategic advantages, such as a central location, resilient digital infrastructure, and competitive costs, Egypt is set to attract more foreign investments and enhance its status as a regional outsourcing hub.

Conclusion

Egypt's outsourcing sector is on a robust growth trajectory, driven by strategic government initiatives, significant foreign investments, and a burgeoning talent pool. The sector's impressive performance in recent years highlights its potential to become a leading global hub for outsourcing and digital services, promising substantial economic benefits and job creation for the country. As Egypt continues to leverage its unique strengths and strategic location, the future of its outsourcing industry looks exceedingly bright.