Back to the complete issue
Wednesday, 1 March 2023

Egypt’s burgeoning smartphone assembly industry just got a boost

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.


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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.