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

By developing a national strategy with UNCTAD expertise and private sector support, Egypt’s government plans to harness online opportunities.

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 Egyptwas presented in Geneva during E-Commerce Weekas 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.

Mr. Yasser El Kady of Egypt

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.

“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.

Six “mega-projects” envisioned as part of Egypt’s National E-Commerce Strategy

Establishment of an E-Commerce Business Facilitation Hub
Launch of a National B2C E-Commerce Platform
A Rural E-Commerce Development Initiative
Empowerment of youth and small and medium-sized enterprises
An E-Payments mega project
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. Funding 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.”

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.

Prosperity for all

As the UN focal point for the development aspects of science, technology and innovation, UNCTAD helps developing countries use information and communications technologies to participate more effectively in the global economy and improve peoples’ lives and wellbeing.

In addition to national e-commerce strategies, UNCTAD helps developing countries to measure their readiness to take part in the digital economy and to assess the effectiveness of their ICT policies.