Coffee with: CIT Minister Amr Talaat: In this second part of our conversation with CIT Minister Dr. Amr Talaat (LinkedIn), Talaat spoke to EnterpriseAM about how our professional lives will be changed by AI, the localization push in the manufacturing sector, and the country’s huge potential to become a digital services export hub. Below are edited excerpts from part two of our interview:

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ICYMI- In part one of our conversation with Talaat we discussed the strategy that has reshaped the sector, ongoing plans to develop internet and mobile network infrastructure, expansion of submarine cable capacities, and the future of the outsourcing industry. Check it out here.

Amr Talaat: The second edition of Egypt’s National AI Strategy was launched earlier this year. It focuses on six main pillars, including making computing resources accessible to startups and expanding AI use through the ministry’s Applied Innovation Center to drive development across sectors. For example, the center developed a speech-to-text application with an accuracy rate exceeding 96%, which is now used in the justice sector, as well as an application for early detection of common diseases such as diabetic retinopathy, breast cancer, and glaucoma.

EnterpriseAM: There’s often talk that AI will replace humans and destroy jobs. What’s your view?

AT: Every global company tells us that AI empowers humans, not replaces them. This topic has dominated discussions everywhere. At the Arab CIT Ministers Council, we started this conversation back in 2019. Some traditional jobs will disappear, and others will emerge, but the idea of AI completely taking over is exaggerated.

At the same time, it’s wrong to think AI won’t impact jobs at all. In my view, the need for humans will expand alongside AI. For example, companies like Concentrix started with 28k employees and have now grown to 40k — adding more jobs, despite the rise of chatbots and generative AI.

EnterpriseAM: How did the CIT Ministry attract companies through the national mobile manufacturing program?

AT: This point is crucial. Last year, 3.3 mn mobile devices were manufactured in Egypt. This year, we expect to close at around 10 mn devices across 15 brands — covering 81% of local market needs. The factories’ combined capacity stands at 20 mn devices, exceeding domestic demand, which means strong export potential. Some manufacturers have already received export offers under the Agadir Agreement to Morocco and Tunisia.

Negotiations are currently underway with several major Chinese mobile phone manufacturers to set up operations in Egypt early next year, while current investments in the sector stand at around USD 263 mn. The investment will create some 9k jobs, including a new model from one of the leading global phone brands to be manufactured locally. The ICT sector has become a key growth driver, rising from 3.2% of GDP in 2018 to 6% last year, with annual growth rates between 14% and 16%.

EnterpriseAM: What about investment in fiber optics?

AT: We see huge potential here. There are four global brands operating locally with a total capacity of 4 mn km, while local demand is about 2.5 mn km. This means there’s room for exports, especially since fiber’s heavy weight and high shipping costs make Egypt a competitive location for manufacturing and exporting. We’re currently in talks with Chinese firms to shift production from China to Egypt to serve Europe and the US, particularly with Egypt’s freetrade agreement with the EU.

EnterpriseAM: Local content is key to industrial localization. What’s the current share?

AT: The local component ratio currently stands at 42%. We’re in talks with international component manufacturers to set up shop in Egypt. Alongside plans to raise production to 10-15 mn phones annually, we’re targeting a local component share of 60-65%.

EnterpriseAM: Egypt has become a major destination for outsourcing and offshoring. What makes Egypt attractive to foreign firms?

AT: Recently, global companies have started to recognize Egypt’s potential. The sector has transformed from a purely service-based model to a production- and investment-oriented one focused on digital exports. We’re attracting global firms to establish outsourcing centers, thanks to Egypt’s stability, digital infrastructure, and, most importantly, its talent.

EnterpriseAM: What’s the current value of Egypt’s digital exports?

AT: Digital exports reached USD 7.4 bn by the end of the last fiscal year, excluding freelancers whose contributions we’re now surveying. Of that, USD 4.8 bn came from outsourcing services. Egypt now ranks among the world’s top three destinations for outsourcing, attracting firms from India, Europe, and the Gulf.

EnterpriseAM: Are there new incentives for investors in the sector?

AT: The biggest advantage right now is our skilled workforce. We’ve launched multiple training initiatives. Many global companies struggle with labor shortages amid rapid tech shifts, but Egypt offers a young, trained population. That’s why even leading countries in outsourcing like India and Vietnam see Egypt as a reliable supplier of global talent, as it offers both cost efficiency and project stability.

EnterpriseAM: The government says it has included data centers in the privatization program. What does it mean by this?

AT: We’re opening potential investments for the private sector to establish large-scale data centers, while maintaining full confidentiality and security of citizens’ data.

EnterpriseAM: Are there further incentives?

AT: We’ve introduced a list of investment incentives, shortened the time needed to launch operations, and assigned an ITIDA representative to each foreign company to expedite procedures. We also have specialized tech zones, such as the one in Beni Suef.

EnterpriseAM: What about youth training?

AT: We have a training program for employment that supplies trained youth to foreign companies, which then hire them directly. This program has attracted firms to expand their operations in Egypt after a few months of pilot runs. We also launched initiatives like Digital Egypt Pioneers and Digital Egypt Cubs, and this summer we introduced the Digitopia competition. The contest targeted youth aged 10-35 in three tracks — AI and programming, digital arts, and cybersecurity — drawing 25k participants who formed 7k teams. Winners in each category will receive EGP 1 mn, with results to be announced by the end of this month. We also introduced a fast-track hosting program that allows foreign companies to test operations in Egypt with local partners before committing to full investment, and many have gone on to establish permanent operations.

EnterpriseAM: Do foreign companies get tax exemptions?

AT: Companies don’t ask for exemptions because demand is high and cost structures differ. What they need most is tax stability and transparency to ensure the viability of their projects.

EnterpriseAM: It’s been said that workers and trainees in the sector earn salaries in USD. Is that true?

AT: Many salaries are paid in USD and linked to specialization, performance, and output. One professional can export services worth USD 25k-120k annually, and their pay reflects that productivity.

EnterpriseAM: Cybersecurity is becoming increasingly important. How is Egypt addressing this?

AT: Cybersecurity requires both awareness and strong governance. Public awareness is crucial; it’s society’s responsibility, not just the government’s. We must protect our digital assets like we protect our physical ones, especially personal data. Governance and legislation are also important. We have a data protection law, a Data Protection Center, and ongoing discussions with major public and private firms that handle large amounts of personal data to ensure compliance with proper data storage, transfer, and disclosure rules.

EnterpriseAM: The restructuring of Egypt Post has been mentioned as an investment prospect. What’s the plan?

AT: We’re restructuring Egypt Post to capitalize on its major assets, particularly public trust and accessibility. We’ve launched several tech-aligned services and plan to roll out digital post boxes in commercial centers.

The postal service now also provides financial services such as microloans and consumer finance by hosting licensed lenders. We have also recently launched the Felousy app through Post for Investment, allowing citizens to explore and invest in funds easily. The key strength of the postal service remains public trust, coupled with continuous efforts to identify safe, high-yield investment options.

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