Egypt offers example of how developing countries can plan for e-commerce

Famed for its ancient souks and bazaars, Egypt is now looking to the future of commerce by backing a far-reaching strategy that aims to double the number of businesses selling products and services online by 2020.

UNCTAD’s National E-commerce Strategy for Egypt was presented in Geneva during E-Commerce Week as a best practice example of how developing country governments can work with intergovernmental and private sector partners to plan for an “e-commerce ecosystem” that boosts growth, skills and jobs.

The potential for e-commerce in the Arab-speaking world’s most populous country is pyramid-sized.

A government survey found that just 5% of internet users over 15 years old in Egypt shop online, and this figure drops for women, older people and people living outside cities and towns.

And very few Egyptian enterprises currently sell online – only 1 in 10 handicraft enterprises use the internet in any way, and only a fraction of these sell their products online.

“This strategy is not only relevant to Egypt since it could be replicated elsewhere,” UNCTAD Deputy-Secretary Isabelle Durant said. “We hope that it will be useful for Egypt to share its experiences with other countries.”

Yasser El Kady, Egypt’s minister of communications and information technology, said: “E-commerce offers developing countries like Egypt opportunities for inclusive growth and enhanced market access. Small and medium sized enterprises are the engine of growth, hence leveraging e-commerce can bring great benefits. Egypt hopes to be among the top 30 knowledge economies by 2030.”

Mr. El Kady said that the strategy is part of the Vision 2030, a national economic plan elaborated by the Egyptian government.

"The national e-commerce strategy fed into and was integrated in the formulation of Egypt's new sustainable development strategy: Egypt Vision 2030," he said.

“We have been investing big time in information and communication technology infrastructure over the last three years, including, for example, in 5G networks,” he said. He added that with more than 4,000 post offices, Egypt’s logistical and micro-financial infrastructure offered a competitive advantage. A similar opportunity existed in its young, well educated population and its geographical position as a global telecoms hub.

1. Establishment of an E-Commerce Business Facilitation Hub
2. Launch of a National B2C E-Commerce Platform
3. A Rural E-Commerce Development Initiative
4. Empowerment of youth and small and medium-sized enterprises
5. An E-Payments mega project
6. Improve branding of Egypt as a business process outsourcing destination

Shared goals

In devising the strategy, UNCTAD and the Ministry of Communications and Information Technology worked with other United Nations agencies and the World Bank. 

"The World Bank is pleased to have contributed to Egypt's National E-Commerce Strategy in collaboration with UNCTAD," Martin Molinuevo, Senior Counsel, Macroeconomics, Trade and Investment Global Practice, World Bank Group, said.

"It is our hope that our recommendations, set out in this strategy will serve in advancing financial inclusion and e-payments in Egypt, and to harness the capacity of e-commerce to boost economic growth and promote shared prosperity."

Funding for the work was provided by US multinational financial services corporation Mastercard.

“We applaud the progress of Egypt’s National E-commerce Strategy, which highlights the government’s commitment to strengthen the economy and connectivity to global markets,” Khalid Elgibali, Mastercard’s Division President for the Middle East and North Africa region, said.

“Mastercard will continue to support the execution of the strategy to further advance the payment ecosystem and showcase the benefits of digitization in the country. The National E-commerce Strategy is a testament to our shared goals of a more inclusive, effective payments ecosystem."

DHL Express Egypt Managing Director Ahmed Elfangary said that the logistics sector in the country was ready to support the government's ambitions.

"There have been many activities in the last years showing the Egyptian government's focus on e-commerce, among them the collaboration with UNCTAD on a national e-commerce strategy which is a great milestone for Egypt's economy," he said.

"DHL and the logistics sector are ready to support the Egyptian government in its implementation of the strategy and strengthen e-commerce growth in the country."

Policy and payments

The strategy, the first such national e-commerce strategy developed by UNCTAD after a request from a member state, sets out an overarching objective and six sub-strategies, recommendations, six “mega-projects”, and an action plan. The strategy also gives guidance on implementation, monitoring and evaluation.

It focuses on bottlenecks identified by an analysis of Egypt’s e-commerce landscape, and makes recommendations in eight policy areas:

• Information and communication technology infrastructure and telecom services

• Logistics and trade-easing measures

• Laws and regulations

• Electronic payments

• Electronic platforms

• Skills development and building talent

• Awareness-raising

• E-procurement (B2B, B2C or business-to-government purchase and sale of supplies, work, and services)

Research undertaken as part of the strategy found that Egypt needs to establish an authentication framework for e-payments, such as 3D secure, adopt universal banking, create new payment methods, and strengthen e-money products such as mWallet.

The strategy advises that awareness of e-payments could be raised by such measures as lucky draws and a national lottery, and that zero liability for customers in unauthorized transactions should be adopted.

UNCTAD's ICT Policy Review (ICTPR) Programme

The strategy was developed through UNCTAD's ICT Policy Review Programme​. UNCTAD is mandated to promote trade in developing countries, and serves as a focal point within the United Nations on issues of science, technology and innovation for development. In this context, it assists countries in reaping greater development gains from ICTs through trade. Its ICT Policy Review Programme provides technical assistance, advisory services, diagnostics, methodology and strategy development on e-commerce and ICT national planning at the request of governments.