MPs yesterday voted to slash customs duties and eliminate development fees on imported mobile phone components in a bid to boost manufacturing and localize the industry. Under the amendments, the 5% state development fee will no longer be applied to components, while customs tariffs will be cut to as low as 0% for some items.

Components are currently subject to duties as high as 30%: The government currently has a 30% customs duty in place on earphones, while a 5% duty is applied to batteries, chargers and mobile cameras, and 2% is levied on screens, Asharq Business reported yesterday.

2% is now the norm: The tariffs applied to batteries, speakers, and cameras imported for smartphone assembly will be cut to 2% under the amendments. Phone screens, which were already charged 2%, will be made exempt from customs.

The beneficiaries: Players in Egypt’s burgeoning smartphone assembly industry.

Uh, wait, Enterprise? We assemble smartphones in Egypt? Heck yes, we do. Samsung started assembling TVs in Egypt and is now our top non-oil exporter. It assembles two models here. Homegrown Sisco Egypt is another pioneer of the industry, while Xiaomi is planning to establish a EGP 1 bn phone factory in Egypt which could open in the second half of this year. Chinese manufacturers Oppo and Vivo have also said they are interested in the market.

What they said: This “serves the government’s policy of localizing industries and reflects the current hard global economic conditions which pushed the state to reduce costs burdened by local industrial projects,” deputy chairman of the House’s Budget Committee Mostafa Salem said.

NOKIA TO EXPORT EGYPT-MADE PHONES THIS YEAR-

Locally-assembled Nokia are heading overseas: Nokia phone manufacturer HMD Global plans to export phones assembled in Egypt to North Africa this year, Tamer El Gamal (LinkedIn), general manager at HMD Global, told Asharq Business (watch, runtime: 2:24). Target markets could include Tunisia, Morocco and Algeria, he said on the sidelines of an industry conference in Barcelona.

REMEMBER– Nokia phone manufacturer HMD Global signed an agreement with Etisal for Advanced Industries (EAI) last year to assemble 1 mn mobile phones in Egypt, and its factory has been up and running since September.

It could double its production capacity before the end of 1H 2023: The company currently produces 4k phones every day, and could raise this to 8k by June, El Gamal said.

Climbing the value chain: HMD Global has until now concentrated on producing 2G and 3G phones in Egypt. That change next quarter: The company will begin assembling 4G phones in April, El Gamal said. 5G phones could be introduced in 2024, he added.

Customs decision to help offset currency problems: El Gamal believes the move would help “make up the difference” in USD exchange rates following the devaluation of the EGP, which has lost almost half its value over the past year. “We’ll be able to provide our products to consumers at appropriate prices,” he said of the decision.