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Chronicle of the Middle East and North Africa

Sisi’s Tech Pursuit Clashes with Human Resource Investments

Sisi's Tech
Egyptian President Abdel Fattah el-Sisi holds a press conference with German Chancellor Olaf Scholz at the Chancellery in Berlin, Germany on July 18, 2022. Emmanuele Contini / NurPhoto / NurPhoto via AFP

Khaled Mahmoud

Egyptian President Sisi seeks to transform Egypt into a technology-producing nation. During the National Project for Developing the Egyptian Family event, Sisi discussed IT graduates’ qualifications for high-paying jobs. He stated that only 111 out of 300,000 graduates would qualify to participate in a state-sponsored training programme costing $30,000 per programmer.

“This is because my education[al system] is sick”, Sisi said before he told Egyptians: “Wake up! Pay Attention! This is a matter of utmost importance; we must build a real citizen, capable of keeping up with technology.”

Qualifying Programmers

Sisi’s proposed programme allows students to graduate after 6 instead of 18 months. In this context, Prime Minister Mostafa Madbouly announced that the programme aims to qualify programmers for the market of multinational corporations and will elect a group to be granted state-funded internships and education.

Statistics showed that participants in the worldwide qualifying exam disappointed Sisi and his Prime Minister and “did not live up to expectations.”

Hoping to nurture a qualified generation of programmers, Sisi said that “normal education does not get us anywhere” and is not compatible with the current challenges Egypt must face.

As it is an era of technology, he stressed the importance of modern technology as a central component of the state’s comprehensive development plan to rid Egypt of administrative corruption.

Sisi, who previously said: “It is difficult for us not to participate in 4G technology,” emphasised its use to benefit society. He went on to call on the world to use technology to combat the spread of extremism.

Human Capital Development

A government population study has pinpointed its inability to provide adequate living conditions and education for its population. Egypt’s population reached 102.5 million in 2021 and is expected to grow to 180 million by 2052.

Although the state has set a population growth plan to enhance human capital from 2021 to 2023, spending on health and education is still significantly less than the amounts dictated by the Egyptian constitution. Articles 19 and 21 state that the government must allocate no less than 4 per cent of the GDP to primary education and 2 per cent to higher education. However, the 2021-2022 budget only allocated a combined 2.4 per cent.

Also, Article 18 states that the government must allocate no less than 3 per cent of the GDP to public expenditure on health. Only 1.5 per cent was allocated in the 2021-2022 budget.

According to the aforementioned study, it is necessary – particularly since Egypt ranks 116th out of 189 on 2020’s Human Development Index – to adhere to the constitution’s percentages regarding public expenditure on health, education and training to improve workforce skills and develop human capital.

Dr Hala al-Said, Minister of Planning and Economic Development, said Egypt increased investments in technology by more than 300 per cent last year. She pointed to the efforts made to support the digitisation of the Egyptian economy to achieve the 2030 Sustainable Development Goals and the adoption of proactive policies to nurture productive capacities able to keep up with the digital economy.

Concurrently, the Regional Director of Human Development of the World Bank, Keiko Miwa, stated that Egypt had overcome the pandemic thanks to investing in technology. She also praised the Decent Life Initiative, the Upper Egypt Local Development Program and other projects.

Another government study recommended continuous improvement of personal skills and preparation for the jobs of the future that will accompany modern technology. According to the study, this includes rethinking and refining the role and rights of ‘remote workers’ on a larger scale and addressing polarisation in the labour market in close coordination between government, companies and educational institutions.

While the agricultural and industrial sectors face tremendous challenges, rapid digitisation may be a great source of opportunities for the Egyptian economy in the mid-term.

Government Initiatives

The study recommends developing and expanding industrial policies to include knowledge-intensive services such as IT and financial services. This would enhance competitiveness in the export of high value-added goods, as well as supply and export capacity.

The Egypt Makes Electronics initiative aims to transform Egypt into a centre and international factory for African, Arab and European markets to design and manufacture advanced electronics before 2030. The initiative also aims to benefit from manufacturing electronics as a central pillar for the growth of the Egyptian economy, as it will create hundreds of thousands of job opportunities.

The IT Industry Development Authority (ITIDA) will implement this initiative in three phases: the first phase from 2018 to 2021, the second from 2021 to 2025, and the third from 2025 to 2030. It will be carried out by a team of leading experts in management and electronics manufacturing technology, with the cooperation and support of strategic partners from ministries, relevant authorities, universities and research and training centres.

The first phase, with a budget of approximately 1.5 billion EGP (roughly $79 million), aims to increase the size of the electronics industry to about $5 billion annually, in addition to increasing exports from $1.5 billion at present to around $3 billion annually. The first phase aims to create 25,000 new job opportunities in this sector.

The Egyptian state founded the ITIDA to lead the development of the Information and Communications Technology (ICT) industry and enhance the sector’s global competitiveness to contribute significantly to the country’s economic growth.

The agency is tasked with developing IT by identifying local industry’s needs and addressing these needs with highly efficient and tailored programmes. Additionally, it provides consultancy in developing sector-specific policies and promotes trade in local and international markets.

Through the constant pursuit of meeting needs and achieving goals, the agency works to lead and mobilise efforts to develop the Egyptian IT sector and enhance its international competitiveness.​

The agency, which has received international awards, says it plays an essential role in Egypt’s economic growth by working tirelessly to develop the IT industry, noting that it is doing its utmost to sustain Egypt’s IT work environment.

According to ITIDA, Egypt has multiple factors enabling it to move forward in the export of ICT. While Egypt has an abundance of talent and technical qualifications, labour costs are much lower than in other outsourcing markets.

The agency’s CEO, Amr Mahfouz, stated that Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO) are exporting industries that enable Egyptian youth to compete in international markets or to find employment with foreign companies while working from Egypt as remote employees or freelancers. This industry has the potential to increase foreign currency inflows, prompting the Egyptian state to make a $2 billion investment in infrastructure, including the internet.

At the same time, the state founded the Technology Innovation and Entrepreneurship Center to support innovation and enhance entrepreneurship in the ICT sector, which contributes to increasing national economic growth.

The centre, established in 2010 to place Egypt on the global innovation map, is the fourth centre in the MENA region accredited by the European Business Network.

Technology Market

Researchers noticed a significant boom in the ICT sector, as the number of IT companies increased from 3,813 in 2010 to 8,019 in 2021. According to the latest Ministry of Communications and Information Technology report, the ICT sector produced 4 per cent of Egypt’s GDP, amounting to 93 billion EGP (roughly $4.9 billion) in the 2018-2019 fiscal year.

The collective capital of companies operating in the ICT sector totalled 369 billion EGP (roughly $19.5 billion) in 2020, compared to 44.74 billion EGP (roughly $2.4 billion) in 2010, confirming its contribution to the country’s income in local and foreign currencies.

The dean of the Faculty of Artificial Intelligence at Menoufia University, Dr Osama Abdel Raouf, believes that the applications of artificial intelligence are the main entrance to the new republic of Egypt. The Egyptian government rushed to establish specialised colleges two years ago since the field significantly impacts state administration.

Egypt is seeking to benefit from Chinese technology in the reclamation of vast areas of land through what is known as smart or precision agriculture which depends on modern irrigation systems.

According to experts, Egypt is seeking to localise the electric car industry, which would constitute a massive leap in the Egyptian industrial sector and a way of opening new technological markets for the country.

The latest ICT Ministry statistics indicate that, from October to December, the total number of trainees in the Information Technology Institute’s capacity development programme was almost 15,000, while the total number of trainees in software reached approximately 34,000.

Considering all this, it is evident that the most critical measures of the comprehensive economic reform programme adopted by Sisi’s government should focus on priority sectors such as technology-intensive manufacturing, agriculture, and communications and information technology.