Five-Year Plan to Lift Egypt’s Software Exports to $2 Billion

A five-year plan presented to the Egyptian government to promote the country’s software industry has received enthusiastic backing from world leading software makers as well as the local software industry in Egypt, according to ACCPAC International, a business management and e-business software solutions company.

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By  Massoud Derhally Published  September 4, 2001

A five-year plan presented to the Egyptian government to promote the country’s software industry has received enthusiastic backing from world leading software makers as well as the local software industry in Egypt, according to ACCPAC International, a business management and e-business software solutions company.

The Union of Egyptian Industries presented the study last week in hope of increasing the size of the software industry in Egypt from its current size of $50 million to $2 billion. While the study focused on the tremendous potential of the Egyptian software industry, especially in the domain of localization, customization and consulting, it highlighted taxation as a deterrent to the promotion of a competitive software industry.

International software vendors eyeing opportunities in the Egyptian market welcomed the Union’s announcement. “Egypt is a major market for software development and this plan has the potential to create tremendous opportunities for software developers in the country,” said regional manager for ACCPAC International Inc., Marc Van der Ven. Local software houses were also quick to applaud the plan and considered it a milestone for the growth of Egypt’s software industry.

“We don’t want to re-invent the wheel,” commented Hala Rashed from Mostafa Shawki and Co, the second largest consultancy firm in Egypt. “Since the early nineties, many software development houses in Egypt shifted their business models from original software development to selling packaged solutions. The market today demands that packaged solutions of international software vendors be customized to address the needs of local companies and growing businesses.”

The union’s study estimates that there are 160 software development houses in Egypt employing around 10,000 developers. Egypt benefits from a large pool of human talent that comprises a considerable number of software experts, all qualified to localize international modules. However, high taxation on imports has made it hard for Egyptian companies to offer competitive packages. The study advised that high taxation on IT imports is one of the major obstacles facing the Egyptian software industry, and called for a cut on import taxes from the current 25% to 3% in order to make the industry more profitable.

The Union’s study also called on the Egyptian government to include the software industry as a main item in trade pacts signed between Egypt and the rest of the world. The study concludes that lowering custom duties on imports would boost Egypt’s software imports by $300 million in the first year, due to the decrease in cost of production.

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